THIRUVANANTHAPURAM; Chief Minister Pinarayi Vijayan on Tuesday said that Kerala Cooperative Bank to be known as "Kerala Bank" will be formed by August 16 next year. He made the announcement at the high-level meeting to evaluate projects of various departments at the secretariat here on Wednesday. The state government has already submitted the application to Reserve Bank of India along with the proposed bank's next five years' business policy including redeployment of staff and unification of investment and loan policy.
As per the proposal, the 14 district cooperative banks will be integrated with state cooperative bank for the formation of the Kerala Cooperative Bank. The government had earlier initiated steps to obtain necessary permission in principle from RBI and the NABARD for the initiative. According to the government, the present three-tier cooperative would be converted into a two-tier system and the existing primary agriculture cooperative societies would be retained as such. The new bank would be able to function by levying interest on financial products sans exorbitant service fees.
The government pointed out that with the merger of SBT with its parent SBI ,the Kerala based bank had ceased to exist and the new bank can resolve that shortcoming. It may be recalled the high-level committee headed by M. S. Sreeram of the Indian Institute of Management (IIM) Bangalore, had submitted the report on Kerala Bank to the chief minister with detailed recommendations for its formation on April 28. The panel report had asked the government to sanction Rs 1,000 crore either as budget allocation or 'long-term subordinated debt' or grant for capital investment support. It also recommended constitution of a Kerala State Financial Regulatory Authority to supervise financial institutions under the co-operative sector.
