Thrissur: The state government is reportedly making a move to salvage the Karuvannur Cooperative Bank, which is in a crisis after CPM leaders allegedly committed a fraud of Rs 300 crore.
The irregularities are pegged at Rs 300 crore, but the government estimates it to be only Rs 150 crore. The move is to provide Rs 75 crore as special assistance for now. A portion of this would be provided by the Kerala Bank and the remaining amount through various agencies as special assistance.
The government is giving preferential support to the Karuvannur bank even though there are other crisis-hit cooperative banks in the state. The government reportedly decided to step in after CPM leaders came under the scanner.
Losses of around Rs 60 crore suffered by the customers due to the irregularities at the Puthur Cooperative Bank, ruled by Congress leaders, are yet to be compensated. Even when the case came up before the High Court, the government did not give an assurance that the money would be repaid.
The Kerala Bank is unlikely to get the nod from the Reserve Bank of India to provision such a large amount in lump sum. Moreover, the Karuvannur bank already owes Rs 42 crore to the Kerala Bank. This is why the government is pitching in with the special funds under the guise of helping the depositors.
Currently, the party leaders have not been arraigned as accused in the case. Also, no move has been initiated to freeze the assets of the leaders. Sixteen officials of the cooperation department have been suspended.
