After the merger of State Bank of Travancore to State Bank of India, Keralites all over the world are waiting eagerly for the launch of Kerala’s Own Bank – Kerala Bank. The main objective of the Kerala bank is to strengthen the cooperative sector here.
Task Force for Kerala Bank Formation
On 31st May 2017, the cabinet of Kerala government decided to set up a task force to complete the formation of Kerala Bank in 20 months (by end of Feb 2019). Mr. V R Ravindranath, retired as the Chief General Manager of NABARD will be the chairman of this task force. There will be four experts from Banking, IT, Management and Legal areas in this task force.
Sreeram Committee Report
Five-member Expert Committee, set up in July 2016 headed by M S Sreeram of Indian Institute of Management (IIM) Bangalore was assigned with the study of the Kerala Bank. This committee submitted the report to Kerala Chief minister on April 2017. Based on the report of M S Sreeram Committee, the latest task force headed by Mr. V R Ravindranath has to make plans for starting Kerala Bank in next 20 months. It will be their duty to publish Sriram Committee report and seek public opinion about it. A timely action plan needs to be created to meet the target date.
One of the key recommendation in this report is to set up a state owned financial regulatory body called “Kerala State Financial Regulatory Body”, which can regulate and supervise like Reserve Bank of India to inspect the banking operations. This will help to gain the confidence from RBI for this new Bank.
Changes in existing Co-operative Banks
In order to set up Kerala Bank, the account and money transactions in various co-operative banks should be unified. The restructuring of existing employees and finding new employees with professional qualifications should be sought. The Kerala Co-operative Society ordinance by the State Government will be amended to incorporate the changes. This is an ordinance for replacing the structure of district co-operative banks with credit co-operative societies as single-vote groups and making the three-level cooperative banking system in two heads. The Bill could not be introduced in the House because the assembly session was shortened.
To get Reserve Bank of India’s Permission
For the formation of Kerala Bank getting permission from Reserve Bank is one of the major hurdle. Even if it is possible to go ahead with the existing license, the merger of District Cooperative Banks and State Cooperative Bank will require special permission from Reserve Bank.