Rejects Reserve Bank’s stand; HC upholds act of merging Malappuram District Cooperative Bank with Kerala Bank

KOCHI: The Kerala High Court upheld the merger of Malappuram District Cooperative Bank with Kerala Bank. The single bench had earlier passed an order upholding the action. The high court rejected the Reserve Bank's stand against it and the pleas filed by former League MLAs and presidents of some primary banks in favor of the UDF.

The RBI's argument was that the amendment to the Cooperative Act should be repealed. However, the court observed that mere majority is enough for the merger. The court also asked why opposing to the merger even though it has been approved.

The petitioners had earlier argued that the amendment brought by the government for the merger of Malappuram District Co-operative Bank was against the provisions of the central banking regulation act. The government had earlier informed the court that the measures were taken in consultation with the Reserve Bank and that the validity of the central law should not be considered in the matter where the states have the power to pass laws.