Kerala Assembly has begun a special one-day session to discuss the crisis in the cooperative sector in Kerala following stringent curbs imposed on the functioning of cooperative banks and credit societies as part of demonetisation of high value currency notes.
Piloting the debate on the subject, State Cooperation Minister A.C. Moideen said the 700 odd cooperative institutions in the State, which served a large swathe of the population, has been hit by the RBI curbs. All the major cooperative banking institutions were subject to RBI norms. If there was any shortcoming on the part of any particular institution, the concerned institution would be asked to comply with the RBI guidelines and directives. The cooperative institutions were also subjecting themselves to scrutiny by the Income Tax Department, he said.
Mr. Moideen said the cooperatives collectively had a deposit base of Rs. 1.27 lakh crore. The banks had been told to comply with the directive of the Income Tax Department that deposits in excess of Rs. 25 lakh should be reported to it and that tax should be deducted at source where required. State Chief Minister Pinarayi Vijayan, Finance Minister T.M. Thomas Isaac and MPs from the State had called on Finance Minister Arun Jaitley with the plea that the cooperative banks and credit societies should be permitted to engage in exchange of demonetised currency notes. Although Mr. Jaitley had assured them that the Centre would consider their pleas, nothing has happened so far, he pointed out.
Participating in the discussion, former Chief Minister Oommen Chandy congratulated the LDF government for having, for the first time in the country, convene a special session of the Assembly the complete breakdown in the cooperative banking sector in Kerala.
The State Assembly is expected to adopt a formal resolution urging the Central government to relax the curbs on cooperative banks and credit societies vis-a-vis the demonetisation currency note exchange process.
