Surat: With fresh currency notes in short supply ahead of Diwali, Gujarat’s urban cooperative banks are looking beyond the state to meet customer demand. Some banks have begun sending teams to other states to procure notes, while industry bodies have approached the Reserve Bank of India (RBI) seeking higher allocations, particularly of smaller denominations.Cooperative banks have traditionally struggled to secure fresh notes during the festive season as most do not have their own currency chests and depend on nationalised banks for supplies. This year, however, the shortfall has become more acute, prompting the Gujarat Urban Cooperative Banks Federation (GUCBF) and the South Gujarat Cooperative Banks’ Association (SCOBA) to write to the RBI.Jyotindra Mehta, chairman of GUCBF, told TOI that several urban cooperative banks had received barely 10% of the fresh currency they had indented for Diwali. Most of the notes supplied were in Rs 100 and Rs 500 denominations, while demand was considerably higher for Rs 10, Rs 20 and Rs 50 notes.“We have written to the issue department of the RBI to provide fresh currency to cater to Diwali festivities. Many UCBs (urban cooperative banks) were provided fresh currency amounting to just 10% of their indents. The majority of the notes are in denominations of Rs 100 and Rs 500, whereas demand is high for Rs 10, Rs 20 and Rs 50 notes. As customers turn to non-UCBs, it may result in a permanent loss of customers. So, we have demanded an additional 40% allocation of fresh notes, especially in smaller denominations,” Mehta said.Mukesh Gajjar, immediate past president of SCOBA, which represents 42 UCBs in south Gujarat, said the association had sought additional supplies and timely distribution. Fresh notes are in demand during Diwali and the New Year for gifting, bonus payments and religious ceremonies, he said.The shortage has forced some banks to travel outside Gujarat to arrange supplies. Kalpesh Shah, general manager of Surat People’s Cooperative Bank, said the bank had seen a sharp drop in fresh currency allocation compared with last year.“This year, there is a severe crunch of fresh currency. Supply is down by more than 35% compared with last year. We have had to send teams, accompanied by armed security, to Mumbai to procure fresh notes. We also have to pay for insurance for the journey. With a business of Rs 13,800 crore, more than three lakh customers and 36 branches, we get almost nothing when it comes to fresh currency. The banks we depend on will naturally prioritise their own customers, leaving us with very little,” Shah said.Jalpa Jain, managing director of Ahmedabad-based Aapni Sahakari Bank Ltd, said the supply of fresh notes had steadily declined over the years, making it difficult for banks to meet a demand that peaks during the festive season.“Gradually, the supply of new currency notes has decreased over the years. Our customers expect new notes during the festival period—the only time in the year they ask in large numbers—and we are not able to fulfil their demand because there is no adequate supply,” Jain said. “This year, we have received just about 10% of what we required. People need new notes for pooja and for bakshish (gifts). There should be more availability during Diwali.”The shortage has also affected traders, for whom fresh notes and coins are part of traditional Diwali rituals. Businesses typically worship cash and account books during the auspicious muhurat marking the start of a new financial year.Jayendra Tanna, president of the Gujarat Traders’ Federation (GTF), said the organisation had received several complaints from members across the state.“We are getting complaints about non-availability of new currency notes and even coins,” Tanna said.Black market thrives amid shortageThe shortage has reportedly created an opportunity for brokers and agents who allegedly source fresh currency bundles through contacts in nationalised and private banks and sell them in major city markets at a premium.In Ahmedabad and Surat, agents are said to charge an additional Rs 250 to Rs 350 for bundles of Rs 50, Rs 20 and Rs 10 notes. Bundles of Rs 100 notes are reportedly available at a premium of around Rs 200. Manek Chowk in Ahmedabad and Varachha, Mahidharpura and Bhagal in Surat are among the areas where fresh notes are readily available through such agents.“It is surprising that black marketeers have access to fresh notes while ordinary people do not. They manage to source the notes from banks and other states and sell them at a premium,” said Kanji Bhalala, director of the National Cooperative Bank Federation.
