Minister for Cooperation and Registration V.N. Vasavan has said that the Kerala Cooperative Societies Act will be amended to introduce timely changes. A subcommittee has prepared a draft report on this.
The amendments will be introduced after holding discussions with cooperators aligned to both the Left Democratic Front (LDF) and the United Democratic Front (UDF), he informed the Assembly on Thursday.
He was responding to questions by UDF legislators on the lack of safeguards in the cooperative sector against the background of the Karuvannur Service Cooperative Bank loan scam.
‘Flouting RBI norm’
A.P. Anil Kumar (Congress) pointed out that cooperative banks in the State often overlooked the Reserve Bank of India (RBI) guideline that their administrators must disclose assets. Since the instruction was often flouted by banks helmed by political leaders, there was a need for overhaul of the existing system, he said.
To N.A. Nellikkunnu’s (Indian Union Muslim League) charge that the lack of a regulatory mechanism had left the sector prone to financial misappropriation, Mr. Vasavan said efforts were on to implement a cooperative audit monitoring system. He also rubbished the Opposition’s claim that the Karuvannur scam had undermined the credibility of the sector.
On Karuvannur scam
Dismissing the Opposition’s allegation that around ₹350 crore had been siphoned off from the Karuvannur bank, the Minister said an ongoing probe had detected a misappropriation to the tune of ₹104.24 crore. This included ₹102.55 crore sanctioned as loan (including its interest) and ₹1.69 crore embezzled from the retail stores operated by the bank.
Pointing out that its managing committee has been dissolved, he said its members, bank secretary Sunil Kumar, branch manager Biju, an employee Jils and Rubco Commission agent Bejoy were found guilty of wrongdoing. The report of the ongoing audit was expected in two months. A nine-member committee had been constituted to detect lapses. The police had also undertaken a criminal investigation. The Minister said that the government would come up with a package to repay the defrauded depositors of the bank.
Minister’s counter
While the Minister had to fend off pointed scam-related questions largely aimed at putting the government in a spot, he hit back by saying that the irregularities had mostly occurred from 2010 to 2014, implying that they took place under the watch of the Oommen Chandy government (2011-16).
K.T. Jaleel (Independent) appeared to revive his allegations of money laundering against Deputy Leader of Opposition P.K. Kunhalikutty of the IUML. He asked the Cooperation Minister to give details of the NRE investments allegedly made by Mr. Kunhalikutty’s son in the A.R. Nagar Service Cooperative Bank in Malappuram.
This was met by a point of order raised by the Leader of Opposition V.D. Satheesan who urged the Speaker to prevent the Question Hour from being used for personal attacks. He also accused Dr. Jaleel of twisting the statement made by Mr. Kunhalikutty in the House a day ago.
