Thiruvananthapuram, Kerala: Kerala Bank is buckling up to examine and resolve the crises faced by cooperative banks. An action plan will be prepared for the revival of loss-making banks.

It is estimated that 863 primary cooperative banks in the state are incurring losses. The total loss amounts to Rs 7,042 crore. If the loss exceeds the bank's own funds, it will not be possible to return the entire amount to depositors. Kerala Bank’s intervention aims to prevent such a situation, which could damage the credibility of the cooperative sector.

Experts in the fields of banking and management will supervise the inspection and preparation of the plan. The president, secretary, a member of the administrative body, and senior staff of the loss-making banks will be part of the action plan.

As per the decision, the inspection will be conducted in three batches, involving 120 people. Each batch will inspect 10 cooperative banks. Training will begin in the second week of July at the Co-operative Staff Training Institute, Manvila, Thiruvananthapuram. In the first phase, 30 banks that require financial improvement will be included in the action plan. If successful, a second phase will be undertaken.

Goal

Along with the financial assistance of Kerala Bank, the functioning of primary cooperative banks will be improved by utilising various schemes of the Central and State Governments.

The causes of the losses will be assessed, and a tailored action plan will be formulated for each bank. Lapses in business, rising arrears, increasing deposits, and declining loan disbursals are among the key factors contributing to the losses.