The state cabinet has announced a moratorium on loans given by cooperative banks. Defaulters will not face any action till March 31 next year. The government has also asked the cooperative banks to make the Know Your-Customer (KYC) regulations procedures mandatory.At a meeting with Nabard officials and representatives from cooperative banks chief minister Pinarayi Vijayan urged the banks to shift toward core banking tasks for complying with KYC regulations. To ensure that the banks banks comply with RBI norms they need to adopt a new software, he said.

 

However, the chief minister has made it clear that the state government will not allow any attempt by the Reserve Bank of India to take over control of cooperative banks in the state.

 

"They are free to inspect accounts or transactions made in the cooperative banks. But it does not mean that they can take over control of these banks," said Vijayan while addressing a meeting of Nabard officials and representatives from cooperative banks. In a move which will come as a relief to many, the government has also decided to allow those who have deposits at the cooperative societies to withdraw their money from the district cooperative banks.They can withdraw up to Rs 24,000 in a week. Those who have accounts in the cooperative societies can open mirror accounts in the district banks, said cooperation minister Kadakampally Surendran.

 

The chief minister urged the Nabard to provide all financial support to the cooperative banks. The cooperative banks and Nabard need to work together to ensure that the deposits of the people remain safe. The representatives of cooperative banks must go door-to-door for instilling confidence among the people, Pinarayi said. The government has ensured that the cooperative societies and banks function in a transparent manner and hence there was no need for any concern, he said.