The Reserve Bank of India has approved merger of Kerala's district cooperative banks with Kerala State Co-operative Bank, paving the way for the state government to set up its own bank.
Thirteen district cooperative banks would be merged with Kerala State Cooperative Bank for forming the so-called Kerala Bank, according to people in the Pinarayi Vijayan-led government.
The proposed Kerala Bank will have the largest banking netork in the state.
“Happy to know that the Reserve Bank of India has given the final nod for the setting up of the Kerala Bank. We hope that the formation of the new bank will accelerate development of the state,” Chief Minister Vijayan said in a Facebook post.
The final nod by the central bank was subject to certain conditions, Vijayan said, adding that the setting up of the new bank would also be in accordance with the final verdict of some cases pending before a court in this regard.
All the district cooperative banks, except the one in Malappuram district controlled by the opposition Congress-led United Democratic Front, had approved the Left government's proposal of amalgamation in their respective general body meetings.
The government had claimed that the objective of the formation of the Kerala Bank was to strengthen the cooperative sector, while the Opposition had alleged that it would destroy the traditional cooperative sector.
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