Thiruvananthapuram: Kerala’s Cooperation Minister VN Vasavan will travel to Delhi on Wednesday to meet with legal experts after the Indian Reserve Bank rejected the state’s request to allow cooperative societies to use the word ‘bank “.
A close associate of Vasavan said the Kerala government had no choice but to take up the issue legally.
“Since the RBI issued clear guidelines to this effect, Kerala has done its best to argue its case with the central bank. the central bank last month in several Malayalam dailies on various cooperative societies using the word “bank” in their names, said the aide who declined to be identified.
“By the way, Union Finance Minister Nirmala Sitharaman informed the Lok Sabha the other day that the RBI had rejected the Kerala government’s plea and therefore there was no another way than to take it back legally, ”added the assistant.
The RBI notice ordered cooperative societies not to use the words “bank”, “banker” or “bank” in their names, except to the extent permitted by the provisions of the Banking Regulation Act 1949 or by the RBI.
He also noted that cooperative societies accept deposits from non-members / nominal members / associate members, in violation of the provisions of the 1949 law, and that insurance coverage under the Deposit Insurance Corporation and Credit guarantee is not available for cooperative deposits. Companies.
The Kerala government had expressed deep concern over the RBI’s advice and Chief Minister Pinarayi Vijayan recently attacked the Centre’s arbitrariness towards the states and criticized the authorities for trying to confuse the cooperative sector of the state and said the Center should refrain from such movements.
One of the reasons why Vasavan rushes to Delhi is the cooperative sector in Kerala, especially the banking segment is very strong and has a huge deposit base and is the help of the local people, when it comes down to it. This involves getting quick loans against collateral, as compared to getting loans from commercial banks. (IANS)