Constitution of the Kerala Bank has received a major impetus with the Reserve Bank of India seeking recommendations from the National Bank for Agriculture and Rural Development for according in-principal clearance for the State government’s proposal.
Banking sector sources told The Hindu here that the apex bank’s decision to seek NABARD’s recommendations for granting the first-level approval for merging the 14 district cooperative banks with the Kerala State Cooperative Bank could be deemed as a very positive step that would expedite the process. The apex bank is understood to have conveyed its decision to NABARD.
The State government had sought approval of the RBI as well as NABARD for its merger proposal three months ago. On getting the RBI nod, the State government would formalise the merger process that would set the ground for having an exclusive alternative banking solution for the State.
Prior to that the government would engage the stakeholders for explaining its plans and taking them into confidence. Once the new entity comes into being with about 3,825 branches, it would perhaps be one of the affordable banking networks for the common man and marginalised sections who could have banking transactions without any hidden or service charges. This would perhaps be the major advantage of the bank, sources said.
The new bank, sources said, is expected to meet the financial needs of the marginal farmers, traders, micro-business units and such others who rely on money-lenders at present.
The government has already worked out a plan for having a trained professional workforce for manning the bank and it would not be confined to just routine banking services alone. It has been proposed to sell other banking products such as insurance and pension schemes too.
Given the non-resident Keralites population in the State, it also aims at securing a lion’s share of the 1.5 lakh crore NRI business too.
The cooperative sector that has deep roots in the State, will be able to meet its social obligation of lending a helping hand to the poor and the marginalised sections and also offer good service to customers at different levels, sources said.
