In response to the ongoing Karuvannur Co-operative Bank scandal, both the CPM and the Kerala Government have initiated immediate damage-control measures. This comes after the Enforcement Directorate (ED) began arresting party leaders allegedly implicated in money laundering associated with the case. It’s noteworthy that neither the party nor the government had taken decisive action even when several depositors tragically resorted to suicide after losing their savings in the scam.
As part of their strategy, the Co-operative Department will be directing primary co-operative societies in the state to invest in the beleaguered Karuvannur bank. These funds will then be utilized to provide relief to depositors who suffered losses in the Karuvannur bank.
Sources indicate that profitable primary cooperative societies will be asked to make temporary deposits in the Karuvannur bank. These deposits will eventually be returned to the primary societies when the government establishes the proposed revival package for co-operative banks. However, it’s important to note that the fund’s actualization hinges on the government framing the necessary rules for its operation.
Previously, the government had considered collecting funds for the Karuvannur bank through the Kerala Bank. However, it soon became apparent that this route was not feasible due to restrictions imposed by the Reserve Bank of India (RBI).
In the meantime, the government plans to launch the revival package within a month, with a meeting scheduled for October 3 to discuss the procedures involved. This meeting will be attended by Minister for Co-operation V N Vasavan, senior officers of the Co-operative Department, and representatives of the Kerala Bank.
The government aims to secure funds for the proposed fund from three sources. Firstly, there are funds paid as dividends by primary co-operative societies to the Kerala Bank as a reserve fund. Secondly, there’s an available amount of Rs 1200 crore originally earmarked by the government as the Agricultural Price Stabilization Fund. Thirdly, contributions from the government itself are anticipated.
When the revival package is initiated, the government will require a minimum of Rs 30 crore in its coffers. To address this matter, the minister plans to convene an online meeting with bank presidents on October 4.
Notably, significant meetings regarding this issue have already taken place at the AKG Centre, the state headquarters of the CPM. The first meeting was attended by party state secretary M V Govindan, Kerala Bank chairman Gopi Kottamurikkal, and vice-president M K Kannan. The second meeting included CPM members on the director board of the Kerala Bank and its employees.
Minister Vasavan has subsequently announced that all deposits in Karuvannur, which have reached the end of their terms, will be returned to the rightful depositors.
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