Thiruvananthapuram: The CPM and the Kerala Government have launched emergency damage-control measures in the Karuvannur Co-operative Bank scam after the Enforcement Directorate (ED), which launched a probe into money laundering charges in the case, started arresting party leaders allegedly involved in the malpractices. Ironically, neither the party nor the government had taken any concrete measures even when several depositors committed suicide after losing money in the scam.
According to the plan, the Co-operative Department will be directing primary co-operative societies in the state to invest in the crisis-hit Karuvannur bank. Subsequently, these funds would be utilized to help depositors in the Karuvannur bank who lost their money.
Sources said that primary cooperative societies which are operating on profit would be asked to make temporary deposits in the Karuvannur bank. These deposits would be returned to the primary societies when the proposed revival package for the co-operative banks is set up by the government. At the same time, it is pointed out that the fund would become a reality only after the government frames the rules for the purpose.
Earlier, the government had toyed with the idea of collecting funds for the Karuvannur bank through the Kerala Bank. However, it soon realized that this was not possible due to the restrictions imposed by the Reserve Bank of India (RBI).
Meanwhile, the government is planning to launch the revival package within a month. A meeting to discuss the procedures in this regard has been convened on October 3 by Minister for Co-operation V N Vasavan. Senior officers of the Co-operative Department and representatives of the Kerala Bank will take part in this meeting.
The government aims to find money for the fund from three sources. Firstly, there is the money paid as dividend by primary co-operative societies to Kerala Bank as a reserve fund. Secondly, an amount of Rs 1200 crore which was kept aside as Agricultural Price Stabilization Fund by the government is available. Thirdly, there will be contributions from the government.
When the revival package is launched, the government will need at least Rs 30 crore at its disposal. The minister will summon an online meeting with the bank presidents on October 4 to discuss this matter.
Other significant meetings have already taken place on the matter at AKG Centre, the state headquarters of the CPM. One was attended by party state secretary M V Govindan, Kerala Bank chairman Gopi Kottamurikkal, and vice-president M K Kannan. CPM members in the director board of the Kerala Bank and employees took part in the second meeting.
Vasavan later said that all deposits in Karuvannur which have completed their terms would be returned.
Other measures
The CPM is also launching a door-to-door campaign on Sunday to regain the people’s trust in the co-operative sector. The programme will be led by V Joy MLA, the district secretary of the CPM in Thiruvananthapuram.
Employees of co-operative banks also have been directed to canvass for deposits which are equal to the amounts withdrawn by the people in panic. A convention of employees is scheduled on October 15 for the purpose.
Deep debt
Even while the government claims that Karuvannur bank should recover around Rs 400 crore, the investigations have revealed that several assets of the institutions are already mortgaged. For instance, the title deed of its Satabdi Mandiram is pledged with the Kerala Bank for Rs 12 crore. Karuvannur bank also has a non-recoverable loan of Rs 52 crore with Kerala Bank.