The government will form a consolidated fund of ₹500 crore for cooperative banks and registered primary agricultural credit cooperatives, Minister for Cooperation V.N. Vasavan said here on Friday.
Addressing a press conference here, Mr. Vasavan said the proposed consolidated fund was part of the government interventions designed to resolve the crisis faced by some of the institutions.
In a bid to widen the safety net for depositors, the norms of the Kerala Cooperative Deposit Guarantee Fund Board would be amended to raise the deposit guarantee limit from the present ₹2 lakh to ₹5 lakh.
At present, this guarantee was applicable only when a cooperative society faced liquidation. This condition would be amended so that depositors could be returned up to ₹5 lakh in a crisis.
₹35 cr. for Karuvannur Bank
The Karuvannur Service Cooperative Bank in Thrissur, which was embroiled in a loan scam, would be provided ₹35 crore urgently for returning deposits that had matured.
For this, Kerala Bank would provide ₹25 crore and the Kerala Cooperative Development and Welfare Fund Board ₹10 crore. Deposits to the tune of ₹142.71 crore in the bank had matured, the Minister said. Loans outstanding amounted to ₹368 crore. Short and long-term measures were in the pipeline for hauling the bank out of the crisis, he added.
The government intervention was aimed at streamlining the operations of the financial institutions in the cooperative sector and to make sure they did not lose business, the Minister said.
