Credibility is the hallmark of the banking sector. People deposit money in banks in the belief that they can withdraw it when the need arises. No one will deposit money in any bank that is functioning any differently. The banking industry was run by private individuals and trusts before nationalisation. Even after the central government took over the banks, they were controlled by officials, not politicians. The Reserve Bank of India also exists to oversee. The banking sector is still going on flawlessly for the common man. Most of those involved in banking frauds are the super-rich, industrialists and so on. However, that has not prevented the common man from withdrawing his deposits. Co-operative societies emerged locally in India, parallel to the banking sector.

In the past, co-operative societies were run by very honest people. No news of irregularities in connection with any societies was heard at that time. Today, irregularities worth crores of rupees in connection with co-operative societies are coming out one after the other. The latest is the fraud at the Nemom Service Co-operative Bank. According to preliminary information, a fraud of around Rs 62 crore took place by duping investors here. It was in the audit report for the financial year 2023-24 that revealed that the bank had incurred a loss of this amount. Rs 11.84 crore was spent as interest on fixed deposits during this period. However, the bank received only Rs 2.73 crore as interest on the loans given.

The biggest frauds take place in co-operative banks, which are mostly ruled by the people of one single party. The biggest example of this is the fraud at Karuvannur Bank in Thrissur. The fraud that took place at Kandala Bank in Thiruvananthapuram district is no different. For more than two decades, the administration of the Nemom Service Co-operative Bank was controlled by local leaders of the CPM. Even though the office-bearers took turns, the affairs of the society were controlled by a few people. Though there have been complaints against them several times, the party has not intervened much. What has led to the current collapse is that the society's control has been reduced to just a few leaders with vested interests. An estimate of around Rs 2 crore was prepared for the construction of a new building for the society. However, Rs 4.5 crore was spent on this without obtaining the permission of the registrar of the co-operative.

Depositors have demanded that there should be an investigation regarding some office-bearers of the society starting establishments, purchasing vehicles and constructing buildings. It is also alleged that a secretary took a loan of around Rs 40 lakh in the name of relatives and family members at low interest, without submitting the required documents. A special counter had to be opened at the Nemom police station as the depositors came as a group to lodge complaints. 800 complaints were received within two days! The auditor's investigation is yet to be completed. Those who have deposited money for various purposes come to the bank every day and return empty-handed. The government should conduct an inquiry, find the culprits and produce them before the law. Such frauds can be prevented in the future only if the properties of the fraudsters are confiscated and exemplary punishment is given. Steps should also be taken to avoid the sense of infallibility of political leaders in such co-operative societies.