Pinarayi was addressing a meeting of representatives from the cooperative sector in Thiruvananthapuram.

No black money in cooperative banks will not succumb to RBI Kerala CM Pinarayi
news Demonetisation Thursday, December 01, 2016 - 07:21

Kerala Chief Minister Pinarayi Vijayan on Wednesday said that there is "no black money in cooperative banks" and everything was according to rules and regulations.

Vijayan, addressing a meeting of representatives from the cooperative sector in Thiruvananthapuram, declared that Kerala will "not succumb fully to RBI with regards to the cooperative banks".

"There is no black money in the cooperative banks and the business is as per the rules and regulations. We are not going to succumb to the RBI, but we have no qualms in them or the enforcement agencies conducting checks on these banks," said Vijayan.

A few months back at Kochi, officials of the Income Tax department were not allowed to conduct an inspection at a cooperative bank following stiff resistance from the local trade union people.

The cooperative banking sector in Kerala is a three-tier system, with about 1,600 primary cooperative banks attached to 14 district banks, which are further linked to the apex Kerala State Cooperative Bank (KSCB).

The total deposits in these cooperative banks are around Rs 1.27 lakh crore. Trouble started for the cooperative banking sector in Kerala when the RBI withdrew the permission to cooperative banks to accept the spiked Rs 500 and Rs 1,000 currencies.

Consequent to the RBI's tough position, the traditional political rival fronts have been very critical of the Modi government for its stand on the cooperative banks.

But with the state BJP solidly behind the Centre's move to reign in these cooperative banks, State Cooperative Minister Kadakampally Surendran on Wednesday said that directives have gone to cooperative banks that they should comply with taking up the 'Know Your Customer' details.

One reason for a change in the state government's stand is, according to reports, old currency worth Rs 1,624 crore is being held in these cooperative banks.

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