Are depositors of cooperative banks in Kerala under duress?

Thiruvananthapuram: With a few cooperative banks in Trissur and one in the state capital city in trouble and hapless depositors running from pillar to post to get back their money, a question mark has arisen over the sector.

The cooperative sector is literally the backbone of the state’s rural economy, and the growing troubles in some banks is making the depositors rush to their trusted Cooperative banks in the rural areas to check the status.

Cooperative banks in Kerala are basically headed by local leaders affiliated to the leading political parties in that locality and hence this sector is politicised to the core and any aberrations leads to huge political upheavals.

Incidentally none other than the State Minister for Cooperation V.N.Vasavan has pointed out that the Cooperative banking sector in the state has a 40 per cent share in the banking business in the state with a deposit base of over Rs 2.5 lakh crore and has extended loans to the tune of Rs 1.86 lakh crore. He accused the Centre of using the ED to torment this sector.

The ruling CPI(M) in particular is going through difficult times ever since the Enforcement Directorate has begun probing the Karuvannur Service Cooperative Bank loan scam case in Trissur where raids and intense questioning of those who matter is currently on.

In a major embarrassment for CPI(M), the ED arrested one party councilor last week and two suspected middlemen last month. The agency has questioned two top party leaders -- legislator and former State Minister A.C. Moideen and state committee member and former legislator M.K .Kannan. The entire top brass, including Chief Minister Pinarayi Vijayan and State secretary M.V. Govindan is burning the midnight oil on the issue as the CPI(M) at Trissur is neck deep in trouble over the Karuvannur scam.

With the innocent depositors living anxiously, Govindan and Vijayan are trying to do their best to allay fears by saying that the state government will leave nothing to chance and their woes would be addressed. The party has blamed the BJP for letting loose the ED, especially in Trissur where superstar Suresh Gopi who contested unsuccessfully for the Lok Sabha, is eyeing to contest again.

On Monday, Gopi and his party men took out a padayatra to the Karuvannur bank.

State BJP president K. Surendran said the CPI(M) and the Congress are hand in glove when it comes to issues in the cooperative sector and this doesn’t augur well.

A media critic on condition of anonymity said the entire banking business all over the world runs on trust.

“If all the depositors queue up to withdraw their entire deposits from any bank, it will collapse. And this is true for the cooperative banks also as by and large in Kerala in every villager, locals have absolute faith in such banks than the commercial banks due to easy accessibility and friendly local staff and less cumbersome procedures for availing loans.This particular scam has affected the CPI(M) more than other parties because the Cooperative sector is their fortress and even while we have heard news about some such banks headed by Congress leaders also have a problem,” said the critic.

Meanwhile, Leader of Opposition V.D. Satheesan took a strong exception to a report about the Cooperative banking sector that came out last week which indicated that a majority of the banks facing problems were governed by the Congress party