Image for representation only. Reuters/Shailesh Andrade/File PhotoThe Reserve Bank of India (RBI) has asked the National Bank for Agriculture and Rural Development (NABARD) to look into the proposal of the Kerala government to form the Kerala Bank. The state government had proposed the merger of the 14 district cooperative banks with the Kerala State Cooperative Bank to form the Kerala Bank.
The RBI would take a final call and give in-principle approval after NABARD sends in its report, RBI assistant general manager U.V. Patil said in a letter to the Cooperative Department of the state government.
The RBI had recently approved the formation of such banks in Chhattisgarh and Jharkhand. The banks had been allowed to set up ATMs and mini-ATMs and carry out electronic fund transfers.
The Cooperative Department was hopeful of a positive response from the RBI, sources said. Haryana, Punjab, UP, Odisha are also trying to set up such banks.
Ahead of the bank formation, the general bodies of all district cooperative banks should pass a 'merger resolution.' As of now, the only dissenter was likely to be the Malappuram district cooperative bank, sources said.
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