RBI issues guidelines to revive urban cooperative banks in Kerala | RBI | Bank of Kerala

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Thiruvananthapuram: In an effort to resuscitate Kerala’s urban cooperative banks, the Reserve Bank of India (RBI) rescinded certain provisions of the Kerala Cooperative Societies Act-1969. The RBI ordered urban cooperative banks to appoint a managing director. The general manager is not only an official head, but also a member of the administrative committee. Members of the board of directors, including the president, are not expected to interfere in the day-to-day operations of the bank.

The Kerala Cooperative Societies Act confers certain powers on the secretary and the chairman of the administrative committee. The new management of the RBO completely reverses this. With this, the members of the administrative panel also cannot interfere in the loan applications.

Previously, the RBI had asked the Kerala Bank and urban cooperative banks, which have a deposit limit of over Rs 100, to appoint CEOs with the prior approval of the RBI. It was also ordered to appoint a board of directors to bind the CEO and the administrative committee. However, this new orientation to appoint the managing director instead of the CEO is applicable to all cooperative urban banks, regardless of deposit limits.

According to the cooperative rules of Kerala, only a member of the cooperative society can be part of the administrative panel. The new management gives the CEO direct membership to the panel. The maximum term of a director general is two years and can be renewed twice. People’s representatives, including local bodies, cannot be members of the panel with the new leadership.

There are around 60 urban banks in Kerala and the new direction applies to all of them and to Kerala Bank.

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