Letter to the Prime Minister

Dear Narendra Modiji,

I would like to bring to your attention that the Kerala Legislative Assembly had convened an extra ordinary one day session on 22.11.2016 to discuss the situation faced by the state following demonetisation of high denomination currency notes with special reference to the crisis faced by the co-operative sector in the state. The Assembly had authorised an all party delegation to meet you in person, convey our concerns and have a productive discussion in this regard to explore possibilities of finding solutions to the impasse.

However, the turning down of our request to meet you in person has come as a real shock for all of us here. I am writing this letter to convey our concern on the issue and the anguish of about nineteen million co-operators and all the legislators of the state.

I am sure you will appreciate that the co-operatives in Kerala built on the strong vision and tenets of Mahatma on decentralization and villager’s cooperation. I believe that you are keen to continue our dialogue until we resolve the issue and ensure the sustainability of the co-operatives of Kerala. Let me point out some of the undesirable impacts and long term damage the current situation has brought in:

  • (i) There is an impending danger of completely destroying the agricultural and rural credit operational environment, which will surely derail the NABARD operations in the state. The difficulties impounded on the District Co-operative Banks has led to a grinding halt of the downstream and upstream cash flows from and to their primaries.
  • (ii) You are already aware of the unique and synergistic inter linkages among the rural local self government institutions – the Grama Panchayats, the Village Assembly – Grama Sabha and the Sub Grama Sabha neighbourhood groups of the ordinary rural citizens – Kudumbasree groups with the primary co-operative institutions. The Grama Panchayats and the rural households are in doldrums affecting the poor women neighbourhood groups as their financial arms – primary co-operative institutions are being twisted. This infact is leading to complete paralysis of the rural local self governance structure – the Grama Panchayat, the Grama Sabhas and the sub Grama Sabha peoples organizations.
  • (iii) Let me also bring to your notice the human rights violations if the monthly welfare pension to 44 lakhs of widows, old aged, cancer patients and most vulnerable groups of people who receive financial support through the primary co-operative institutions come to stand still.

We seek your support and patronage not only in resolving the current crisis which I am sure you will lend your personal intervention, also in strengthening the robustness and sustainability of the co-operatives in the state. This would help them consolidate their niche and space in serving the youth, the women, the poor and other vulnerable sections of our society. We have already progressed in our efforts to streamline a transparent and robust computerized systems for integrating the District Co-operative Banks operations through core banking solutions. Their operations have also been integrated with the apex bank. Most of them have their networks of ATMs which operate on RuPay Cards making them on par with any other Commercial Bank. I am also pleased to inform you that, the District Co-operative Banks have implemented the tax deductions at source from large depositors as warranted under the Income Tax Regulations.

While we move ahead in the process of resolving the current crisis, I personally assure you that: (i) the District Co-operative Banks operate in a transparent environment reporting their financials to RBI on a regular and timely basis; (ii) fortify the already fool proof membership admission and management processes with the KYC requirements; (iii) closely follow up the audit processes with Reserve Bank of India augmenting the internal audit mechanisms, audit by the registrar of co-operatives as well as the social audit by the general bodies enshrined in the Kerala Co-operative Act; and (iv) furnishing any requested information to the Income Tax Authorities.

In this context an immediate decision that is required would be allow every account holder members of the co-operative structure, including Primary and District
Co-operative Banks the same currency withdrawal rights (Rs. 24,000/- per week as of now) on par with account holders of commercial banking system.

I am directing my Finance Minister to approach Shri. Arun Jaitley Ji with a detailed status report on the above lines.

Once again seeking your personal intervention and kind attention on a top priority basis in resolving the current crisis to strengthen the economic base of our state as well as our country.

With regards,

Yours sincerely,


Shri. Narendra Modi
Hon’ble Prime Minister of India
152, South Block, Raisina Hill,
New Delhi – 110 011.