UCBs body flags acute cash shortage, urges RBI intervention

Surat: The South Gujarat Co-Operative Banks Association Ltd (SCOBA) has made an urgent representation to the Reserve Bank of India (RBI), raising concerns over an acute cash shortage.In its letter, SCOBA, which represents 46 urban cooperative banks (UCBs) in the region, said UCBs have been facing a "severe and persistent shortage" of physical currency for the past one month, which has worsened in recent days. Earlier, banks managed their cash requirements through informal arrangements with public and private sector banks based on existing relationships, it said.The association warned that the shortage is affecting day-to-day cash operations, customer service, and public confidence in UCBs.SCOBA vice-president Kanji Bhalala said such shortages occur every year in March but typically ease after the month ends. "We expect a quick resolution, as the situation generally improves once March is over," he said.SCOBA has urged the RBI to ensure an adequate and timely supply of currency to cooperative banks. It has also sought clear guidelines for currency chests to provide equitable cash support and demanded direct linkage of UCBs with currency chests.Additionally, SCOBA has proposed a regional coordination mechanism under RBI supervision to monitor cash flow and address grievances of UCBs in real time.
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