THIRUVANANTHAPURAM: The Cabinet on Wednesday gave its approval to the Prof. M.S. Sreeram Committee report that had recommended ways to create an apex bank for the state. The committee, which submitted its report on April 28, had called for the merger of district cooperative banks with the apex Kerala Cooperative Bank. The KCB, it is felt, would fill the void created by the loss of SBT.
The Sreeram Committee report had designed a two-tier system with the apex Kerala Cooperative Bank at the Centre and the large network primary agricultural cooperative societies (PACS) functioning not as branches, but as “autonomous nodes” around it. In short, it has not undermined political influence in primary societies. “Now that the report has got the Cabinet nod, steps to secure the approval of the RBI and NABARD will soon begin,” an official statement here said.
A task force headed by former NABARD general manager V.R. Raveend-ranath has already been constituted to provide a concrete form to the proposals made by the Sreeram Committee. The Committee wanted the management of the apex bank, which will remain in the cooperative sector, to be thoroughly professional, but it has not tinkered with the management structure of PACS.
The three regional boards the committee had recommended, too, will have more of political appointments than professional names. In short, politicians will continue to call the shots. Nonetheless, all the non-banking activities of DCBs, like the running of provision stores and marriage halls, will have to be wound up.
The Sreeram Committee report, however, allows PACS to continue with their non-banking activities. The ultimate objective of the cooperative sector reforms recommended by the Sreeram Committee is the RBI nod for the merger process. A key recommendation is the setting up of Kerala State Financial Regulatory Body, an RBI-like regulator that would supervise and inspect credit and entities that perform banking business.
