KOCHI: With the National Bank for Agricultural and Rural Development (Nabard) standing by its guidelines for the merger of the District Cooperative Banks to form the Kerala Bank, time is running out for the state to complete the merger before the RBI-stipulated date of March 31.
In its reply to Chief Secretary Tom Jose’s request seeking exemption from conditions, Nabard reiterated the need for 12,000 functional cooperative societies be given adequate representation in the crucial merger referendum as well as the proposed Kerala Bank along with the Primary Agricultural Cooperatives (PACs). The proportion and/or voting rights of the functional societies are to be decided by the state government on an objective criteria, the apex development financial institution clarified.
The state had approached the RBI for the new bank’s licence through Nabard. Nabard has also advocated a swap ratio of shares in accordance with the net worth assessed and actual worth/value of shares of individual cooperatives.
Cooperation Minister Kadakampally Surendran said the government is strictly following the KCS Act for the merger which only mandates voting rights to PACs and Urban Cooperative Banks. “The other cooperative societies are members of each DCB but are devoid of voting rights in the respective general bodies. The government will furnish a formal reply to Nabard’s observation soon,” said Surendran.
RBI places 19 conditions
THE Reserve Bank of India had put in place 19 conditions, including the Kerala Cooperative Societies Act and rules have to be adhered to during the merger of the cooperative banks. The state had recently amended the Kerala Cooperative Societies Act to bring down the consensus required for the amalgamation of DCBs from a 2/3rd to a simple majority. “With the updated requirement, all 13 DCBs, barring Malappuram, is expected to sail through with a simple majority in the upcoming general body meetings,” the minister said. He said talks are under way with UDF leaders in Malappuram for their support to the state’s plan of strengthening the cooperative banking system.