The proposed Kerala Co-Operative Bank, an ambitious initiative of the CPM-led LDF government, is likely to become a reality in 18 months with a committee submitting its report on its formation on Friday. The government had mooted the bank with the aim of strengthening the cooperative sector in the state.

The expert committee, headed by MS Sreeram of Indian Institute of Management (IIM) Bangalore, entrusted with the study of various aspects of the proposed bank, submitted the report to Chief Minister Pinarayi Vijayan with detailed recommendations for its formation. The report suggested that the government initiate steps to get necessary permission in principle from the Reserve Bank of India and the NABARD.

State finance minister TM Thomas Isaac said the main objective of the proposed bank was to strengthen the cooperative sector in the state. The bank had been envisaged as an apex body of the cooperatives in the state, he told reporters. Making it clear that there would be no job loss due to the proposed bank, cooperation and tourism minister Kadakampally Surendran said employees in the cooperative banks would be redeployed.

Among other things, the report recommended completion of the process for formation of the bank in 18 months by integrating all 14 district co-operative banks with the state-level bank. With the formation of Kerala Bank, the present three-tie cooperative would be converted into a two-tier system. The existing primary agriculture cooperative societies would be retained as such.

The new Bank should be able to function by levying interest on financial products sans exorbitant service fees, the report said. The government should sanction Rs 1,000 crore either as budget allocation or ‘long-term-subordinated-debt’ or grant for the capital investment support, technological integration and human resource development, it said.

A special audit based on the financial statement of March 31, 2017 should be conducted as a prelude to the integration at the district cooperative sector. A project management unit and project advisory board should also be set up for the initiative, it said.