Kerala Bank will seek permission OF RBI to accept money from expats: Pinarayi Vijayan

Pinarayi and Kadakampally were speaking at the state-level inauguration of 65th National Cooperative Week in Kasargod on Wednesday.
Pinarayi Vijayan (File | EPS)
Pinarayi Vijayan (File | EPS)

KASARGOD: The proposed Kerala Cooperative Bank -- to be known as Kerala Bank -- will apply for special permission from the Reserve Bank of India to accept deposit from non-resident Indians, said Chief Minister Pinarayi Vijayan. “If Kerala Bank gets the special permission, it will mitigate the many difficulties faced by lakhs of our pravasi brethren in sending money to their families back home,” he said.
Also, the government hopes that the bank, flushed with remittances, will work for the welfare and development of the state. “Corporate banks often turn their back to the needs of the state... But Kerala Bank will know the pulse of the state’s needs and will work on those lines,” the Chief Minister said.

Kerala Bank -- to be formed by merging State Cooperative Bank, 14 District Cooperative Banks and their 800 branches -- will become a reality before the next financial year, said Minister for Cooperation Kadakampally Surendran. The government and the Department of Cooperation would complete the process to set up the bank before March 31, 2019, he said.

Pinarayi and Kadakampally were speaking at the state-level inauguration of 65th National Cooperative Week in Kasargod on Wednesday. The chief minister said once the RBI granted the special permission, NRI clients could transfer the money to their account in Kerala Bank, and the primary service cooperative banks can deliver the money at the beneficiary’s home the same day or the next day. To be sure, the RBI had given an in-principle permission to set up the Kerala Bank in October, and the government had set up a task force to establish the bank.

‘Bad experiences’

Vijayan said the bank would serve the general needs of Kerala. “Of late, we had a few bad experiences. A few big banks turned their back to the state because they did not take the needs of the public seriously. There were instances where we have to abandon projects and schemes because of that,” he said. “And during such times, the cooperative banks made model intervention to help us,” he said.Citing examples, the chief minister said the cooperative sector was effectively distributing welfare pension without leaving any scope for complaints.

Again, there was an issue of distributing pension of KSRTC employees. “The pension has to be given every month, but the money would only be reimbursed to the bank later. Then too, the cooperative bank stepped up to the task,” he said.

After the floods, when the government was engaged in rehabilitation and rebuilding, a proposal was made to extend a loan of up to `1 lakh to families who lost their belongings. “The government said it will pay the interest component and the families need to pay only the principal amount. At the meeting, all the banks agreed to give loans, but in reality, only the cooperative banks extended the loans,” he said. “The other banks did not even bother to look back,” he said.

Also, the government thought up of a scheme to help the small traders who lost all their merchandise in the floods. “We proposed that a loan of `10 lakh be extended to them to restore their business. But the big banks were not keen to pitch in. In such situations, we feel the importance of cooperative banks,” he said.

A bank which will not exploit people, says Kadakampally

Cooperation Minister Kadakampally Surendran said government will modernise cooperative banks before the launch of Kerala Bank. “It will be a bank that will not exploit its customers,” he said.  According to him, the cooperative banking sector had a deposit of E1.75 lakh crore.

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