# Biju Parawat 05 November 2023, 06:42 AM IST
Kerala Bank was created in the state by considering that the district banks are left only and are a factor that increases the interest rate of the loans received by the primary groups.
symbolic image | Photo: REUTERS
Thiruvananthapuram: Central government is planning to make district cooperative banks mandatory in all states. The Policy Formulation Committee recommended making it a part of the National Cooperation Policy. This will create a crisis in Kerala where the District Cooperative Banks were merged with the State Cooperative Bank to form Kerala Bank.
The assessment of the committee is that district cooperative banks can distribute loans through cooperative societies at regional level without other considerations and restrictions.
Kerala Bank was created in the state by considering that the district banks are left only and are a factor that increases the interest rate of the loans received by the primary groups. It is argued that the cooperative credit sector will be strengthened. Eight states have come to study Kerala’s model of uniting state and district banks, but nowhere has it been implemented.
The central government had appointed a committee to study whether the three-tiered cooperative loan structure would be beneficial to eliminate the district cooperative banks and make it two-tiered. NABARD Deputy Managing Director is the Chairman. Reserve Bank Central Board Director Satish Marate is a member. The recommendation was included in the draft cooperation policy pending submission of the final report.
It is suggested that District Banks should be ensured in every district in consultation with NABARD and Reserve Bank. The Center aims to transform Primary Agricultural Credit Unions (Primary Co-operative Banks in Kerala) into a basic service center in a Panchayat. It is said in the draft policy that District Co-operative Banks will be able to provide adequate credit distribution at the local level. The Center is changing the National Co-operative Policy of 2003.
Merger of Agriculture Development Bank with Kerala Bank will be considered – Minister Vasavan
The government will consider merging the State Cooperative Agricultural Rural Development Bank with the Kerala Bank, Minister V.N. Vasavan said. NABARD Chairman K.V. Shaji personally made this suggestion. This was the minister’s reply. The minister clarified that there is a need for study, examination and political decision in this regard.
2023-11-05 01:12:56
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