Thiruvananthapuram, Kerala: The LDF government, after announcing an increase in welfare pensions, has launched intensive efforts to mobilise the necessary funds to fulfil its commitments.

Officials have been directed to transfer surplus funds from cooperative banks and societies to the government for pension disbursement. Around ₹2,000 crore is being urgently mobilised.

Officials have reportedly instructed secretaries to transfer funds even before the governing bodies of the cooperative banks issue formal approvals, advising that such approvals can be obtained later.

The directive applies to all cooperative societies, not just primary cooperative banks. During a meeting, the Registrar informed officials that districts contributing the highest amounts would be recognised with awards.

If cooperative societies and banks lack sufficient funds, Kerala Bank is prepared to extend loans for the purpose. The funds reserved for purposes other than loans by primary cooperative banks and societies are to be deposited with Kerala Bank. As per regulations, 20 per cent of their total deposits must be maintained as liquid funds. Some cooperative banks even have deposits exceeding this requirement in Kerala Bank. It has been proposed that Kerala Bank will offer loans by using these deposits as collateral to provide money for the pension consortium.

The interest rate charged by Kerala Bank for loans issued against these deposits will be 7.85 per cent.

However, if this amount is given to the pension consortium, it will earn an interest of 9 per cent. According to the Registrar’s calculation, this would result in a profit of 1.15 per cent. However, once deposits are pledged as collateral, they cannot be withdrawn even if other financial needs arise.

The Pension Consortium is required to disburse ₹13,500 crore in pensions from the borrowed funds. Owing to mounting liabilities, cooperative banks have shown reluctance to contribute to the consortium. It is under these circumstances that the government is intensifying its efforts to raise the required funds.