Kerala

RBI okays proposal to merge district co-operative banks to form ‘Kerala Bank’

Logo of Reserve Bank of India at its headquarters in Mumbai.

Logo of Reserve Bank of India at its headquarters in Mumbai.   | Photo Credit: Paul Noronha.

The Reserve Bank of India (RBI) has given the go-ahead to the State government to amalgamate 13 district cooperative banks (DCBs) with the Kerala State Cooperative Bank for forming the proposed Kerala Bank.

All district banks, except the Malappuram District Cooperative Bank, had approved the scheme of amalgamation proposed by the State government at their respective general body meetings. The government may give one more opportunity to the Malappuram bank’s general body to approve the scheme.

The merger approval would be contingent upon the order of the High Court on a case challenging the amendment to Section 14(A) of the Kerala State Cooperative Societies Act. The government would have to complete the stipulations laid for merger and submit a compliance report to the apex bank before March 31, 2020.

Among other conditions laid for the amalgamation, the RBI had insisted that the State government should closely abide by the provisions of the KSCS Act and rules at every stage, strengthen the capital of the KSCB to ensure sustained networth and adherence to capital to risk weighted assets ratio (CRAR) norms, a standard metric to assess balance sheet strength of banks, post merger. It had also said that the State government would have to consistently infuse additional capital and also put in place a well-defined governance structure by amending the KSCS Act.

The government submitted a compliance report to the RBI in March and the final approval for amalgamation of 13 district banks was accorded. Minister for Cooperation Kadakampally Surendran exuded the confidence of completing the procedures within the stipulated time frame.

A letter from the Editor


Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Support Quality Journalism
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | May 26, 2020 12:35:52 PM | https://www.thehindu.com/news/national/kerala/rbi-okays-proposal-to-merge-district-co-operative-banks-to-form-kerala-bank/article29637183.ece

Next Story