In a move to help the State’s cooperative banking sector to overcome the setbacks allegedly caused by currency demonetisation, the Kerala Government is seriously considering shifting of the accounts of several PSUs and boards from commercial banks to district cooperative banks even as the note freeze pushed the ailing public sector KSRTC into further losses and pulled down the revenues of the State-run Kerala State Beverages Corporation (Bevco).
As per the proposal put forward by the Registrar of Cooperatives, shifting of the accounts of State PSUs and boards like Bevco, Kerala State Electricity Board, Kerala State Road Transport Corporation (KSRTC), Kerala Water Authority, Civil Supplies Corporation, Department of lotteries, etc, which are presently with commercial banks, to district cooperative banks.
As a first step, the Government is planning to shift the accounts of Bevco and some other institutions. It also hopes that the accounts of the Devaswom Boards, bodies in charge of administration of Hindu temples, can be shifted from commercial banks to district cooperative banks once a policy decision is taken.
“Corporations like the Beverages Corporation are currently getting fair currencies (after demonetisation of Rs 500 and Rs 1,000 notes). This money is being deposited in commercial banks. In my opinion, it would be beneficial (to the State) if that money is deposited in cooperative banks. A decision will be taken in consultation with the Chief Minister and others,” Finance Minister TM Thomas Isaac told newsmen in Delhi on Friday.
As lakhs of small transactions are taking place in most of these corporations, shifting their accounts to cooperative banks would help in reducing the problem of shortage of small-denomination currency notes, according to Government sources. They say that such a move would also strengthen the move for establishing the proposed Kerala Bank.
Meanwhile, the currency demonetization has pushed the already ailing public sector transport company, KSRTC, into further loss leading to uncertainty in the disbursal of salaries and pensions for the month of November. Officials said the corporation might not be able to make payments to its staff and pensioners before the middle of next week.
“Banks are hesitating to grant loan to the KSRTC as its revenues have fallen steeply. Therefore, payment of salaries and pensions are bound to be delayed this month,” said Transport Minister AK Saseendran. The corporation’s managing director has informed the department heads that the date on which payments could be made could not be predicted. The corporation has started talks with the Canara Bank for availing loan to the tune of Rs 100 crore.
The public transport corporation, which already owes Rs 125 crore to the Indian Oil Corporation in fuel bill arrears, has reportedly been suffering a loss of close to Rs 1 crore per day since November 8, the day the two high-value currencies were demonetized. Before the currency freeze, the KSRTC’s average daily revenue was around Rs 6 crore.
At the same time, the currency demonetization has pulled down drastically the sales turnover of the State-run monopoly bootlegger Bevco. Bevco’s sales turnover was to the tune of Rs 1,037 crore in October. Of this, Rs 855 crore had been coming from the sales in its retail liquor outlets and business through its warehouses, beer-wine parlours and retail liquor shops run by the Cooperative consumers’ Federation accounted for the remaining amount.
There had been a huge drop in this since demonetisation, said sources. This drop in sales turnover occurred as it was not authorized to receive the demonetised currencies for sale of liquor. The fall in Bevco’s revenues has also affected the State Government, which used to get huge amounts of money in taxes from it. However, sources said that there has been a slight improvement in sales in the past one week.