The state government is planning to approach the Supreme Court over the stringent regulations brought by Reserve Bank of India (RBI) in the functioning of cooperative societies in the state. In this regard, the cabinet has decided to seek the legal advice of the advocate general. The state government will also interact with legal experts to know how to go about it.
Mnister for Cooperation VN Vasavan and finance minister KN Balagopalan have been assigned to look over the matter. There is also a plan to send a team of delegates to the Centre, to raise the concerns of the state. The state government will approach RBI too.
Meanwhile, VN Vasavan has alleged that RBI is trying to sidestep from the Supreme Court verdict which safeguards interest of cooperative sector. He also informed that ministers in the other states will be intimated regarding the matter.
In a move which affect around 1,625 primary cooperative banks and around 15,000 cooperative societies in Kerala, (RBI) came up with restrictions in receiving investments. Reiterating the term ‘bank’ should not be used, the RBI put restriction for accepting investments from members without voting power.