Straight Bat: The Not So Cooperative Banks Deserve It
The common man only uses cooperative banks for taking loans out and not for putting money in. So how come deposits of Rs.60,000 crores? | Madan Sivadasan D
On Nov 26, 2016


When archrivals come together for a common cause, it needs no educated guess to deduce that something serious is amiss. The issue of cooperative banks being effectively outcast as part of the drive against black money has brought rival fronts together crying foul over the alleged dictatorial attitude by the Centre. Cooperative banks are noble, their legacy is unquestionable and they are quintessential for the state's existence, so goes the long line of defences.

Cooperative banks are 'cooperative' just by nomenclature. In reality it has exemplified non-cooperation more than anything else, like an obstinate child who simply won't learn. The government says the cooperative banking sector together owns more than Rs.60,000 crore in deposits. Where did this huge sum of money come from? Is it the money deposited by the common public? No. The common man finds cooperative banks good only for taking loans out and not putting money in.

Why? Ask any expert in the banking sector and they will unequivocally advise against depositing money in these banks. These 'cooperative' banks have never cooperated with any of the norms put forward by any of the financial bodies. They haven't cooperated in verifying their tax credentials, they haven't cooperated in verifying credentials of their human resources, they haven't cooperated in knowing their customers before entering into a deal with them, they haven't cooperated with the RTI act, and they haven't even cooperated with technologically updating their banking system.

Cooperative banks get funds from NABARD for helping out rural economy at a low interest which they dole out as loans at high interest rates. For decades it has been the parking ground for black money belonging to politicians and businessmen. The charity works they indulge in are a thin veil to cover their larger interests. Rs.900 crore is the amount they invested in acquiring land for Kochi Metro along the Vyttila-Pettah stretch. Well, that is the precise stretch where the phase-1 works of Metro remains stuck. That should tell you something about their noble intentions.

The political parties who demand justice for cooperative banks, won't dare say there is no black money hidden in these banks. Instead they point out to the supposed harm it might bring to those who have put in their genuine hard-earned money into these banks, even after repeated assurance that all legal money will be protected.

The prospect of the government in power itself calling for a hartal is bad enough. But when it does so to protect and not fight the illegalities existing in the state's finance, as citizens we are forced to hang our heads in shame. The party which is blaming the centre for imposing an authoritarian agenda by wanting to bring all banks under control is the same party which was pushing to unify all cooperative banks under the banner of Kerala Bank.

It doesn't make Modi's demonetization drive any less authoritarian, but proves government's so called concern for common public a farce. Time and again the cooperative banks were warned to mend their ways and get their money sources accounted. They did not. The political parties didn't want to. At the very least, these banks could have showed the decency to cooperate with norms. By failing to do so, only one thing can be said on their current plight - that they deserved it.

Madan Sivadasan D (MSD)

Contributor to Yentha. He lives in Kochi but his heart beats for his home town Trivandrum. Absolutely no ambiguity on his views or in his writings
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