Kerala government's much-awaited project, Kerala Bank, is expected to become a reality by 16 August next year. All formalities in this regard will be completed by 16 August, a government release said. This was stated during the evaluation meeting of various projects chaired by Chief Minister Pinarayi Vijayan, on the second day Tuesday.
What is Kerala Bank?
Kerala Bank comes from the concept of having a state-owned bank, which will benefit the Development and growth of the state. The basic objective of the concept of Kerala Bank is to serve the growing needs of funds for the growth and development of the state.
Merger and RBI approval
An ambitious project of the Communist Party of India-Marxist (CPI-M) led government, the proposal was to form a Kerala Bank by merging district co-operative banks with state co-operative banks, converting the present three-tier cooperative into two-tier system. The government has already approached the Reserve Bank of India (RBI) for necessary permission to start the Kerala Bank, the release said. The re-deployment of employees, its business policy for the next five years has already been submitted to the RBI, the release said.
Aim of Kerala Bank
The objective is to strengthen the cooperative sector, especially in the wake of state public sector bank State Bank of Travancore merging with the State Bank of India, according to the release. Modernisation of the co-operative sector was going on smoothly, and steps for modernization of primary co-operative banks has also begun, it added. Ten Banks That Have Slashed Interest Rates On Savings Bank Accounts
Co-operative banking in Kerala
Co-operative banking in Kerala is presently maintaining a 3-tier system. This consists of "Kerala State Co-operative Bank" on the top level and "District Co-operative Banks" on the second level followed by "Co-operative Banks and societies" on the lower level. After the formation of Kerala Bank, this will be converted to a 2-tier system. This new commercial bank will function as per RBI's guidelines. The new bank would be able to function by levying interest on financial products sans exorbitant service fees.
The government will motivate Malayalees, to join this new banking system and be part of their State's Growth and Development process. The growth of Kerala Bank in the financial sector will indirectly help the growth of private sector, which can attract more NRI remittances. The Best Companies To Work For Unusual Benefits