The Reserve Bank of India has given the final approval for the merger of district co-operative banks in Kerala. The combined entity will be called the 'Kerala Bank'. After receiving the RBI's nod, Kerala Chief Minister Pinarayi Vijayan expressed hope that the Kerala Bank will help accelerate development of the state. "I am happy to note that the Reserve Bank has given final approval for the formation of Kerala Bank. The promise of the state to set up its own bank is being fulfilled," he said.
Vijayan said that the district co-operative banks (DCBs) in the state would be amalgamated with Kerala State Co-operative Bank to form the Kerala Bank. Under the arrangement, 13 DCBs will be merged with the Kerala State Co-operative Bank. All DCBs, except the one in Malappuram district controlled by the opposition Congress-led UDF, had approved the state government's proposal in their general body meetings.
The opposition had alleged that the amalgamation of co-operative banks would harm the sector, whereas the state government had asserted that the move would strengthen the co-operative sector.
In his statement, Vijayan mentioned said that the RBI had given the approval for Kerala Bank on certain conditions and the co-operative department would take measures to ensure that they were met. The state government would have to fulfill these conditions and submit a compliance report to the central bank before March 31, 2020.