A potent political battlefront is shaping up over the alleged corruption in Kerala’s mammoth cooperative banking sector.
Recurrent reports of ordinary families hard-pressed to meet life’s exigencies as they are unable to draw on their savings deposited in “corruption-ridden and bankrupt” cooperative banks administered by the ruling Left Democratic Front (LDF) have incrementally cast the government under a harsh spotlight.
Enforcement Directorate (ED) probes against Communist Party of India (Marxist) [CPI(M)] leaders accused of using party-controlled cooperative banks as a front for money laundering have also not helped the LDF’s public image.
Disconcertingly for the ruling front, the Congress and the Bharatiya Janata Party (BJP) have discerned a full-bodied political opportunity in the unfolding tales of misappropriation of funds, money laundering, organised corruption, loan fraud, and nepotism that have beset the cooperative sector.
Low-interest and welfare-oriented credit societies have a direct and crucial bearing on the lives of lakhs of ordinary citizens, ranging from dairy and rubber farmers to coir and cashew workers, toddy tappers and weavers. Their beneficiaries carry considerable social and political heft and, as a crucial voting bloc, have traditionally hewed to the Left.
Embarrassingly for the LDF, another instance of alleged financial malfeasance in the beleaguered cooperative sector emerged in the public domain the previous week. In a hark back to the Karuvannur bank scam in Thrissur, hundreds of depositors have staked out at the Communist Party of India (CPI)-administered Kandala Cooperative Bank in rural Thiruvananthapuram, accusing the institution of failing to redeem even small pledges.
A routine audit had pegged the depreciation in the bank’s assets at ₹101 crore. The auditors also reportedly stumbled on brazen instances of loan fraud, exaggeration of the value of land put up as collateral for loans, using the same surety to sanction multiple loans to favoured persons, questionable restructuring of credit, and nepotism in appointments.
Leader of the Opposition V.D. Satheesan had described the scams as the tip of the iceberg and said more copycat financial crime involving LDF-administered cooperative banks would stumble out of the government’s cupboard.
CPI(M) State Secretary M.V. Govindan said that the Congress and the BJP, in conjunction with the Central government, were highlighting a one-off incident to besmirch the State’s cooperative sector to advantage corporate players.
Meanwhile, BJP State president K. Surendran accused the CPI(M) of impeding the rule of law by threatening the ED to insulate party leaders from legal scrutiny.
Given the cooperative sector’s social import, the controversy would likely play powerfully across the State’s political sphere in the coming days and set the tone for the Lok Sabha election campaign.
