THIRUVANANTHAPURAM: Kerala State Cooperative Bank which is now changed to Kerala Bank has been fined Rs.48 lakhs by the Reserve Bank of India (RBI) for violating norms. Kerala Bank broke the rules by taking shares of other cooperative institutions and violating gold-loan rules. The fine comes after NABARD submitted its report pointing out Kerala Bank’s violations.

Meanwhile, RBI in its order dated 3 October, said that there is no block to its other activities.

According to RBI rules, a cooperative bank can invest only 2% of its own fund in other cooperative institutions as shares. However, NABARD found that Kerala Bank has not adhered to the limit in investing in cooperative societies such as Pariyaram Medical College, Mangalya Sutra Cooperative Society, etc.

Kerala Bank President, Gopi Kotamuriyil, said that the fine was levied for the actions taken before the state cooperative band and district cooperative bank merged to become the Kerala Bank. NABARD had given its report on 31 March 2019. However, Kerala Bank was constituted on 29 November 2019.

He added that very issue was addressed once Kerala Bank was formed. Action was taken without taking this into consideration. Bullet payment system for gold loan was made foolproof.

Kerala Bank had asked to return the share from other cooperative institutions. However those societies did not respond to the requests and that is why the fine is imposed on Kerala Bank, he said.