Kerala Bank will become the biggest financial institution in the state in the near future, Mr. Pinarayi Vijayan, Chief Minister of Kerala, said while formally announcing the formation of the bank in Trivandrum on December 6. The Reserve Bank of India had given its conditional approval for the formation of the bank in October this year.
The Chief Minister promised loans to farmers at one percent lesser interest than other banks. “If the present interest rate is 7%, it would go down to 6%. This would bring relief to the farmers,” he said. The Kerala Bank would soon evolve into the largest banking network in the state. Mr. Vijayan also said that the bank would be ready to disburse Rs.5,000 crore as short-term loans by March Modern banking solutions such as core banking would be introduced in the bank within a year. Mr. Vijayan said that non-resident Keralites too stand to benefit with the formation of the bank. The state had requested the RBI for enabling Kerala Bank to accept NRI investment and the government was hoping for a favourable decision from the apex bank in this regard.
The cooperative sector was instrumental in popularising banking in the state. Big deposits, loans and agricultural services are the highlights of the sector. The cooperative banks should not change their focus on agriculture loans, he said. He also called upon cooperative institutions to turn into the preferred financial institutions for local selfgoverning bodies. Mr. Vijayan said that corruption will not be tolerated in the sector. The inspecting mechanism will be strengthened. Referring to the Malappuram DCB, which had not joined the new bank, he said: “Those refraining from joining the bank can clear their misunderstanding and join any time. They can talk to the cooperation minister or the chief
minister.”
Addressing the members of the various cooperative banks who have come to attend the formal inauguration of the bank, he said Kerala should set an example and take a lead in setting up a bank of this nature.
The chief minister also received a memorandum from the staff of Malappuram DCB seeking steps to merge the bank with the Kerala Bank.
Mr. Kadakampally Surendran, Minister for Cooperation, said that the new bank will not fleece the customers in the name of service charge.
The function was attended by Mr. E. Chandrasekharan, Minister for Revenue and Housing; Mr. K. Krishnankutty, Minister for Water Resources; Mr. Ramachandran Kadannappally, Minister for Ports, Museums, Archaeology and Archives ; Mr. A.C. Moideen, Minister for Local Self Governments; Mr. M.M. Mani, Minister for Electricity, Mr. T.P. Ramakrishnan, Minister for Labour and Excise; Mr. K. Sreekumar, Mayor, Mr. V.K. Prasanth and Mr. V. Joy, MLAs; Mr. V.K. Madhu, district panchayat president; Mr. Koliyakode N. Krishnan Nair, State Cooperative Union administrative committee convener; Mr. Tom Jose, Chief Secretary; Ms. Mini Antony, cooperation secretary. Ms. P.K. Jayasree, Registrar of Cooperative Societies; and Ms. Rani George, Managing Director, State Cooperative Bank.
With the Reserve Bank of India (RBI) giving the final nod for the merger of the 13 district cooperative banks with the Kerala State Co-operative Bank to form the Kerala Bank, the state government’s long pending dream of setting up its own bank became a reality.
All the district cooperative banks, except the one in Malappuram district controlled by the opposition Congress-led UDF, had approved the government’s proposal of amalgamation in their respective general body
meetings. The High Court had granted permission to the Kerala Bank after evaluating that its intervention in the merger procedures was not needed.
“The High Court has dismissed all cases against the formation of the bank. The process of the legal merger of 13 District Co- operative Banks with the Kerala State Co-operative Bank has been initiated,” Mr. Vijayan had said
earlier. The government had said that the objective of the formation of the Kerala Bank was to strengthen the cooperative sector, while the Opposition had alleged that it would destroy the traditional cooperative sector.
Mr. Surendran had said the setting up of the bank opens up a huge potential for the development of the state. “I believe this indeed is a revolutionary step and will change the face of banking sector in Kerala.”
Mr. Surendran had earlier stated that the first general body meeting of the amalgamated entity will be convened in December itself The post-merger bylaw amendments will be the agenda during the first general body meeting. The state has already decided to appoint Mr. P.S. Rajan, General Manager of the Union Bank of India, as the CEO of Kerala Bank.
