UDF alleges move to destroy co-op banks, walks out of Assembly

Thiruvananthapuram: The Congress-led UDF Tuesday opposed in the state Assembly the LDF government's plan to set up a 'Kerala Bank' by merging Co-operative banks, even as Chief Minister Pinarayi Vijayan brushed aside its concerns saying the move would strengthen the co-operative sector.

UDFs opposed the government's plan to set up the Kerala Bank by merging district Co-operative banks with state Co-operative banks, saying the move would "destroy" the three-tier co-operative system that played a key role in the state's economy.

UDF members also staged a walkout protesting against the refusal for a discussion on the inquiry ordered into the functioning of all 14 District Co-operative Banks, which they alleged, was a "prelude to dismissal of the governing bodies of the banks" as part of the government's agenda to set up the Kerala Bank.

Intervening, Vijayan said the probe into the functioning of District Co-operative Banks was "routine".

He asserted that Kerala Bank mooted by the CPI(M)-led LDF would not only bring transparency but also strengthen the co-operative sector.

"The plan is to merge the District Banks with State Co-operative Bank and create a big bank that would address the challenges faced by the state especially in the context of merger of Kerala-based State Bank of Travancore with SBI," said Vijayan.

The Primary Agriculture Co-Operative societies would continue to remain strong under the new setup, he said.

An expert committee has been constituted to work out details of the proposed Bank and its report was awaited, he further said.

Replying to the notice for the adjournment motion moved by the UDF, State Minister for Co-operation and Tourism A C Moideen said probe into the functioning of district banks was ordered in the wake of number of complaints including irregularities in appointments, disbursal of loans and regarding setting up of ATMs.

He rejected the UDF charge that there was an ulterior political motive behind the order issued under Section 66 of the Co-operative Act.

Attacking the LDF, Leader of Opposition Ramesh Chennithala said the government's move was "undemocratic" and the inquiry was actually a "poison laced in sweet" to "kill" the district banks.

"It is an indirect attempt to dissolve the district banks.

We strongly oppose setting up of the Kerala Bank by destroying the three-tier system of Co-operative system," he said.

Referring to the recent resolution passed by the Assembly against the move to merge SBT with the SBI, Chennithala said "This House has passed a resolution against bank's amalgamation. This (Co-op bank issue) is also a kind of merger," he said.

The objective was to take over the assets and deposits now with the banks in the co-operative sector and that would not be allowed, he claimed.

Taking up the issue, P Abdul Hameed (IUML) said the enquiry was the "first step in dissolving district banks".