Kerala will have a new bank in the cooperative sector titled “Kerala Bank” that will amalgamate district cooperative banks and state cooperative banks, State Cooperation and Tourism Minister A.C. Moideen has announced.
Speaking during an event organised in the state capital recently by a media organization, the minister said his department plans to integrate all the district cooperative banks and state cooperative banks to launch Kerala Cooperative Bank that will have a larger role to play in the cooperative sector.
He said the government is “planning to launch the bank in one year”. “A committee headed by an expert who has worked at Reserve Bank of India will be soon constituted to prepare the detailed report on the project.”
There are 803 units at present including 20 branches of the state cooperative banks and branches of 14 district cooperative banks.
Though the cooperative banks have been able to garner deposits, the minister said, they are still unable to utilise all those deposits for lending out, because of the liquidity maintenance rules of the Reserve Bank.
The cooperative banks are currently under the control of National Bank of Agriculture and Rural Development. It lends out funds at 1% rate of interest to state cooperative banks which when ultimately reaches the end user, becomes 9% rate of interest after it goes through the state, district and primary cooperative banks.
Though it is estimated that there are Rs.1,35, 000 crore NRI deposits in the state, the minister said, the cooperative sector banks cannot reap the benefits as the cooperative banks are under the control of Nabard and while only those banks under the control of RBI can canvas NRI deposits.