Kerala government's long pending dream of setting up its own bank, by merging district co-operative banks, is all set to become a reality with the Reserve Bank of India (RBI) giving the final nod for the move.
With its formation, the proposed "Kerala Bank" will be largest banking network in the state.
Expressing happiness over the apex bank's approval for the initiative, Chief Minister Pinarayi Vijayan said the "Kerala Bank" would be formed amalgamating the district co-operative banks (DCBs) with Kerala State Co-operative Bank.
The final nod by the RBI was subjected to some conditions, he said adding the setting up of the new bank would also be in accordance with the final verdict of some cases pending before a court in this regard.
"... Happy to know that the Reserve Bank of India has given the final nod for the setting up of the Kerala Bank.
... we hope that the formation of the new bank will accelerate development of the state," he said in a Facebook post on Wednesday.
According to government sources, 13 DCBs would be merged with the Kerala State Co-operative Bank for forming the proposed Kerala Bank.
All the DCBs, except the one in Malappuram district controlled by the opposition Congress-led UDF, had approved the Left government's proposal of amalgamation in their respective general body meetings.
The government had claimed that the objective of the formation of the Kerala Bank was to strengthen the cooperative sector, while the Opposition had alleged that it would destroy the traditional cooperative sector.