Page 19 - Banking Finance June 2017

CO-OPERATIVE BANK NEWS

CO-OPERATIVE BANK

NEWS
NEWS
NEWS
NEWS
NEWS

Kerala Co-Operative Bank to be launched soon
District co-operative
Kerala Co-Operative Bank, an initiative of the CPI(M)-led LDF state government,
banks burdened with Rs is likely to become a reality within 2 years with a com-
3,000-crore old notes mittee submitting its report on its formation.

District co-operative banks in the state The state government hadmooted the bank with the idea
are worried as of strengthening the cooperative sector in the state. The
they are bur- committee, headed by M.S. Sreeram of Indian Institute
dened with of Management (IIM) Bangalore, entrusted with the
demonetised study of various aspects of the proposed bank, submitted
notes worth Rs the report to chief minister recommending the formation of the bank.
3,000 crore, officials said. The total
The report opined that the government should initiate steps to get necessary
amount stacked in all co-operative permission from the Reserve Bank of India and the National Bank for Agricul-
banks across the country is estimated
ture and Rural Development (Nabard). State finance minister T.M. Thomas Isaac
at Rs 6,000 crore. While the banks are
said the main objective of the proposed bank was to strengthen the cooperative
forced to give interest on the depos-
sector in the state. The bank had been envisaged as an apex body of the coop-
its to their customers, the growing li- eratives in the state, he said. Making it clear that there would be no job loss due
ability would affect the co-operative to the proposed bank, cooperation and tourism minister Kadakampally Surendran
sector, officials said. Before the kharif said employees in the cooperative banks would be redeployed.
season, the district cooperative banks
in Maharashtra fear that the crop Reserve bank allows co-operative bank to deploy PoS
loans to farmers could be affected in network
wake of their failure to get replace-
ment of the demonetised notes. Reserve Bank of India has allowed co-operative banks to deploy their own or
third party point of sale terminals POS with an intention
A official commented: "The state of increasing digital transactions.
government had already placed the
facts before the Union finance minis- RBI said co-operative banks can deploy their own points
of sale terminals only if their net assets are more than Rs
try in Delhi. But the decision comes
under the jurisdiction of the Reserve 25 crore, gross NPAs less than 7 per cent and no mon-
Bank of India." etary penalty should have been imposed for two financial
years.
However, the banks should have got
the old notes replaced through the Also, the bank's IT systems & core banking solution should have been subjected
RBI before March 30, 2017. to an audit not earlier than six months from application to confirm that the sys-
tem is adequately secure.

BANKING FINANCE | JUNE | 2017 | 19

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