KOCHI: With the March 31 deadline stipulated by the RBI to complete the formation of Kerala Bank arriving fast, the state government, it is learnt, has given the Malappuram District Cooperative Bank (DCB) until February 15 to either secure a nod from its general body for a merger with Kerala State Cooperative Bank (KSCB) or be left out.
To ease the merger process, the Kerala Cooperative (Amendment) Bill, 2019, which seeks a relaxation of Section 14 of Kerala Cooperative Societies Act, 1969, was tabled in the Assembly. It seeks changing the current requirement of a two-thirds majority of members – Primary Agriculture Co-operatives (PACs) – for the amalgamation and transfer of assets and liabilities of two or more cooperative societies, into a simple majority.
Cooperative Department Secretary Mini Thomas said the Bill was tabled on February 1.
“It will be put for discussion on February 12 after scrutiny by the respective subject committee and then be voted upon,” Thomas said. However, even with the updated requirement of a simple majority, the Malappuram DCB, with 80 PACs out of 129 that constitute the general body being controlled by UDF allies, will be the only DCB that will be unable to comply.
Sources at the DCB say employees are urging the UDF leaders to change their stand on the issue as getting left out will ensure the Malappuram DCB will have to transition into an ‘Urban Cooperative Bank’ with the incoming two-tier cooperative banking system in the state. “The management has called for a general body on February 13, and it is expected a simple majority can be attained,” said a Malappuram DCB representative.
The existence of two higher tiers viz., KSCB at apex level and DCBs at middle level, is claimed by the government to add the cost on interest without offering any significant benefit to the lowest tier- PACs. De-layering of one tier will help in unlocking these funds which can be put to more productive use. With the new bank, the government promises to deliver modem banking products such as mobile bankig, internet banking, ATM facilities to the general public at rates lesser than those charged by new-generation banks.