Govt. to raise funds to meet depositors’ claims

The State government on Wednesday informed the Kerala High Court that it has decided to raise funds from various sources to tide over the liquidity problems to the tune of ₹40 crore faced by the Karuvannur Cooperative Bank at Irinjalakuda in Thrissur district.

The submission was made by Special Government Pleader P.P. Thajudeen when a few writ petitions by depositors seeking a directive to return their deposits came up for hearing. The Special Government Pleader submitted that a package was being finalised for settling all the claims by the depositor of the bank.

At a high-level meeting convened by Minister for Cooperation V.N. Vasavan, it was decided to formulate a strategy for the revival of the bank. As per the short-term plan, liquidity of the bank had to be restored and repayment of deposits to those who need money to meet their immediate requirements, besides raising funds from various sources. It was assessed that there was a requirement of ₹40 crore to tide over the present crisis.

It has also been decided to take a loan of ₹25 crore from the Kerala Bank by pledging properties of the bank, besides taking a loan of ₹10 crore from the Kerala State Development Welfare Fund Board. It was also decided to utilise ₹2 crore from the reserve fund, he added.

There was a plan to monetise the bank property. A fast-track mechanism would be put in place for the purpose.

The government expected that ₹50 crore could be monetised within three months. It had also been decided to formulate a long-term plan for the revival and restructuring of other crisis-ridden cooperative societies. A detailed scheme would be prepared for the purpose and the Registrar of Cooperative Society would be entrusted with the scheme, the government pleader submitted.

The meeting decided to restart the monthly deposit scheme (MDS) and gold loan to increase the current account of the society and a small savings deposit scheme to augment funds for the day-to-day operations, he said.

The court directed the government and the bank to report on the evolving situation and also about funds generated for meeting the claims of the depositors. Meanwhile, the court also extended its order directing the bank not to make any payments towards the deposits for the time being before arriving at a reasonable prioritisation of repayment. But the court allowed the bank to make part payments in case of utmost necessity.

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Printable version | Sep 20, 2022 5:38:33 am | https://www.thehindu.com/news/cities/Kochi/govt-to-raise-funds-to-meet-depositors-claims/article65754308.ece