THIRUVANANTHAPURAM: The big hurdle for the materialisation of Kerala bank has been removed as a special general body meeting of 13 district cooperative banks came out in favour of merger of banks.

Only Malappuram district bank was against the merger. There, only 25 per cent was in favour. Thus Malappuram district bank will remain independent even after Kerala bank will come into existence.

The government benefited from nine district banks coming to support the merger with a majority of two by three. Kottayam, Idukki, Ernakulam and Wayanad district banks didn’t get 2 by 5 majority

But the government will be able to merge these banks with an amendment to the cooperative law so that simple majority will be enough.

According to RBI norms, 2 by 3 majority is needed in district cooperative banks but the cabinet amended the rule since 2 by 3 majority was not possible in Congress ruled cooperative banks.

The government’s claim is, the merger is possible technically since in 9 out of 14 banks, there is 2 by 3 majority, even though the RBI doesn’t approve this.
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Besides this, 1033 out of 1555 (66 pc) primary cooperative banks have favoured the merger. Minister Kadakampally Surendran said the above factor was a victory for government and final sanction report in accordance with it will be submitted to the RBI soon.

Meanwhile pro-Congress cooperative banks have said the amendment would not suffice for the merger.