Kerala Bank opens to controversy over RBI approval
THIRUVANANTHAPURAM: The much-awaited Kerala Bank has courted controversy on its inaugural day itself. While Opposition leader Ramesh Chennithala alleged that Kerala Bank hasn’t got the mandatory RBI nod and termed its formulation illegal, the government maintained that with the High Court disposing of the petitions on Friday, now there are no impediments.
The RBI issued its nod in October subject to some conditions which included the High Court decision, said the government. Chennithala alleged that the government announced the bank’s formation without waiting for RBI’s final nod. “A lot of procedures are yet to be done. The HC has given clearance to go ahead to complete those procedures. It has asked the RBI to check whether the government had satisfied the 19 conditions the former had put forth.
The bank could be formed only after getting the final nod,” he said. He warned that the government’s move will sound the death-knell of the cooperative banking system. “Kerala Bank was a crooked idea of the CPM to gain control over district control banks which were out of its reach. The CPM had eyed the R1.53 lakh crore deposit in the cooperative banking sector,” he said. Meanwhile the cooperation minister’s office termed the allegations baseless.
“The RBI had given sanction for the bank in October subject to certain conditions which included the High Court decision on a batch of petitions challenging the 14(A) clause inserted in the Kerala Cooperative Societies Act.
On Friday the HC dismissed these petitions. Now, we have to fulfil the rest of the conditions and submit a completion report to the RBI before March 31, 2020,” a highly-placed officer said. He said the RBI had allowed Kerala Bank to operate with the licence of the State Cooperative Bank. It had directed the district cooperative banks to surrender their licences before March 31.