Corruption in banks cannot be used as an excuse to destroy cooperative sector: CM

Kasaragod: There may be deviants at work in certain areas and the government has taken strict action against those involved in corruption, said Chief Minister Pinarayi Vijayan, referring to the recent scams that have put the cooperative sector under the scanner.

But such isolated incidents are being used to portray the entire sector as rotten, he said in Kasaragod on Saturday, September 23.

He was speaking after inaugurating the head office building of Bedadka Farmers' Service Cooperative Bank at Kundamkuzhy.

He made the comments against the backdrop of the ongoing investigation into the scams in the cooperative sector in Kerala by the Enforcement Directorate (ED). Karuvannur Cooperative Bank in Thrissur district is central to the investigation in which several CPM leaders, including former minister A C Moideen, are under the lens.

In July 2022, the state government said that 399 cooperative banks and societies indulged in financial fraud from 2016-2017 to 2021-2022. The frauds included remortgaging assets, disbursing unsecured loans, tampering with interest rates, recruitment scams, and fixing auctions. The highest number of frauds was reported in Thrissur district. 

Such incidents were reported in commercial banks also, the Chief Minister said. But there was a move to destroy the credibility of the cooperative sector by creating a smokescreen called investigation, he said.

The cooperative sector was a hub of trust which helped it achieve growth, he said. The state government would ensure every penny deposited in cooperative banks was safe, he said.