Karuvannur bank | Photo: Mathrubhumi
Thrissur: The cash-strapped Karuvannur Service Cooperative Bank faces uncertainty on its way ahead with the Kerala Bank rejecting request for a loan worth Rs 50 crores to overcome the crisis.
The ongoing ‘Rs10,000-per-week’ scheme implemented to avoid massive withdrawal of deposits is also not going ahead smoothly as there is severe cash crunch.
The bank had to force its customers to repay gold loans to avoid auctioning the pledged gold as a measure to pool in money to provide at least Rs 10,000 to customers. Most of the gold loan borrowers repaid loans and it was a great relief for the bank.
However, there are other huge loans, including the ones which were granted illegally, that have not been repaid. This adds up to the mess. The bank now is unable to move ahead an inch, said its officials.
The cooperative bank is liable to pay back a loan worth Rs 45 crores to Kerala Bank. The officials of Kerala Bank cite existing arrears as the reason for the inability to grant more loans.
The cooperative bank’s proposal to renew the existing loan to grant the additional amount was backed by the minister for cooperation as well. The President of Kerala Bank, Gopi Kottamurikkal, and Vice-President, MK Kannan, rejected the proposal by stating that the bank does not want to get into the footsteps of Karuvannur bank that became financially ill owing to the irregularities committed by the administrative members.
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