RBI grants permission, Kerala Bank to start functioning from November 1
Thiruvananthapuram: The Reserve Bank of India (RBI) has granted permission to establish Kerala Bank by merging cooperative banks in the state. The state government received the permission letter from RBI in this regard. Kerala Bank will start functioning from November 1, 2019.
The Kerala Bank, which will be formed by merging Kerala State Cooperative Bank and district cooperative banks, is one of the dream projects of LDF government. Even though the government had initiated steps for the formation of the bank soon after the cabinet was formed, it was delayed owing to opposition from some of the district cooperative banks.
As per the system in place, the resolution for the merger has to pass in the district banks with at least two third majority. The government obtained the support of 13 district banks by amending the law regarding the majority required. The government’s decision to take over the debt of the district banks had led to a controversy.
The opposition had approached RBI requesting it not to grant the permission for Kerala Bank. There is also a petition filed by them, pending before the High Court opposing the merger.