State had zero benefit from formation of Kerala Bank, says Chief Minister Satheesan

Keralam Chief Minister V.D. Satheesan Chief Minister V.D. Satheesan on Saturday questioned the rationale behind the formation of the Kerala Bank, alleging that the State has had zero benefit from the move. Mr. Satheesan said the government is of the view that the concept of the Kerala Bank has to be reconsidered.He was inaugurating the State-level celebrations of the 73rd All India Cooperative Week, organised jointly by the State Cooperation department and the State Cooperative Union at Kalamassery in Kochi. He said that with the formation of the Kerala Bank in 2019, by amalgamating 13 district cooperative banks with the Kerala State Cooperative Bank, the cooperative sector of the State came under the purview of the Reserve Bank of India (RBI) regulations. “The cooperative sector was able to make a surge as it remained out of the ambit of RBI regulations,” he said. He said the crisis in the Karuvannur Service Cooperative Bank could have been resolved within 48 hours had there been a Thrissur district-level cooperative bank.“Now there is a State-level bank which cannot do anything. It can’t take over smaller banks in crisis or issue deposit guarantees. What was the benefit of (forming it)? It’s a serious issue. The government will examine it,” the Chief Minister said. He said the government would take steps to ensure a full guarantee for deposits in the cooperative sector.“Restoring public confidence in the cooperative sector will be the government’s top priority. At present, the guarantee of up to ₹5 lakh is available only after a bank enters the liquidation process. This does not provide depositors with an adequate sense of security. The government wants to extend the same level of deposit protection available in nationalised and scheduled banks to cooperative banks as well,” he said.On parties’ nominationsStating that the foundation of Keralam’s cooperative movement was the credibility built by its earlier generation of members, Mr. Satheesan also called upon political parties to carefully examine whom they nominate to cooperative institutions. The Chief Minister also called for mobilising cooperative deposits for income-generating projects.A consortium of cooperative banks could participate in initiatives such as setting up warehouses for Supplyco. Such projects should ensure a regular monthly return, including interest, on the amount invested, he said.Cooperation and Excise Minister M. Liju chaired the meet. Higher Education Minister Roji M. John, Fisheries Minister V.E. Abdul Gafoor, MPs, MLAs and senior officials attended the meet. Published - November 14, 2026 07:30 pm IST