The Kerala government Wednesday decided to merge 14 district co-operative banks with the state co-operative bank as part of its proposal to set up the 'Kerala Bank.'
The cabinet decision comes in the wake of the Reserve Bank of India (RBI) according to in principle approval to the start the 'Kerala bank,' a release Chief Minister Pinarayi Vijayan's office said here. With this, the three-tier co-operative system in the state would become a two-tier model, it said.
Changes would be made in accordance with the conditions laid down by the RBI. This was a step forward to set up the Kerala Bank, the release added.
Meanwhile, Leader of Opposition in the assembly Ramesh Chennithala asked the government to withdraw its decision as it would only lead to the destruction of the co-operative system in the state.
He also pointed out that the RBI has put forth 19 'tough' conditions which the government would find difficult to meet.
Merging of district co-operative banks with the state co-operative bank would result in the destruction of the democratic process in the co-operative sector, Chennithala claimed.
(With inputs from agencies.)