KERALA BANK

Kerala is a state which has a long history of formal and informal financial institutions. Among the provinces and States of Indian Union before independence, Travancore and Cochin topped the list in the range of area and population served by a commercial bank branch. The early institutions were predominantly of the unit banking type. Travancore had 275 joint stock banks in 1932-33 (Oommen, 1976'). Even in the present day banks, chit funds and money lenders CO-exist in Kerala. But Banks occupy a predominant position among the financial intermediaries. They are the leaders in mobilizing deposits and dispersing credit. A review of the progress of commercial banks is relevant in the context of on going financial sector reforms. It is most appropriate to examine the impact of economic policy on the performance of banking sectors in Kerala before making any conclusions about the benefits and shortcomings of reforms.

the Reserve Bank of India has given its final nod to the state government for the formation of the Kerala Bank, an ambitious project mooted by the LDF government amidst protests and resistance from the opposition. The RBI approval, however, comes with a rider that the consent given for the bank would be subjected to the outcome in a number of cases pending before Kerala High Court, challenging the provisions in the ordinance promulgated by the state government to circumvent district cooperative banks’ resistance towards their amalgamation for the formation of Kerala Bank. which the government proposes to make possible by amalgamating 13 district co-operative banks. Malappuram district cooperative bank had raised objections against the amalgamation plan which to an extent contributed to the delay in the formation of Kerala Bank, one of the projects the LDF highlighted in its election manifesto in 2016.