He said that the RBI's public notice on cooperative banks was creating misunderstanding among people.
Incidents of pawning fake gold to avail of loans from cooperative banks and swindling crores of rupees through fake loans are rampant in Kerala.
RBI cancelled 6 licences, issued 123 directives & imposed penalty on UCBs so far in 2021
However, many have expanded their business over the years and now compete with public sector and private banks.
The RBI has also imposed a penalty of Rs 2 lakh on National Urban Co-operative Bank, Bahraich for non-filing of a return on asset and liabilities.
Cooperative banks play a significant role in paddy procurement and disbursements of short term agricultural loans.