Kasaragod: The LDF government can end the crisis facing Karuvannur Service Cooperative Bank if it amends the rules to tap the Kerala Cooperative Deposit Guarantee Fund, said the Leader of Opposition V D Satheesan.

He was speaking at the inauguration of the 35th state conference of the Kerala Cooperative Employees' Front, an organisation affiliated to the Congress, in Kasaragod on Saturday.

The fund has around Rs 600 crore but two conditions limit its usage, he said. One, the fund can be tapped only when the credit societies are defunct, dormant, or under liquidation; and two, the fund can be used to repay deposits up to Rs 5 lakh. A society should be able to access the fund if it runs into a crisis, not when it is under liquidation, he said. "If the government brings out an order scrapping both the conditions, it can disburse Rs 100 crore to the depositors of Karuvannur tomorrow. Wouldn't that end the crisis?" he said.

Satheesan said the credibility of the sector would be revived only if the government stood guarantee to deposits. "But has the chief minister moved his little finger?... He has not even convened an all-party meeting to discuss such a big crisis," he said.

If a UDF government were in power, the Karuvannur issue would have been resolved in 24 hours, he said. "But what surprised me is that the government and the CPM are coming forward to protect the looters," said Satheesan. The first complaint in the Karuvannur bank was filed by a CPM area committee member in 2011, he said. "Six years later in 2017, he was ousted from the party. The CPM launched district-level and state-level inquiries but the plundering continued. So the CPM perpetrated the scam," he said.

The Congress leader said that if anyone tried to plunder people's money from party-controlled societies, they would be ousted from the party first. "I want to make one thing clear, if there is corruption in any UDF bank don't expect the party to protect the perpetrators," he said, to applause from the delegates.

Kerala Bank fails to protect primary societies
The chief minister created Kerala Bank by merging all the District Service Cooperative Banks just to make a name for himself, alleged Satheesan. "We had opposed it in the Legislative Assembly. I had a heated debate with the chief minister. My question was why was the government merging the profitable district banks with the loss-making State Service Cooperative Bank?" he said.

"It was the responsibility of the District Cooperative Banks to protect the primary banks. I said in the Assembly that the merger would hurt the cooperative sector," he said.

"Now what did Kerala Bank president Gopi Kottamurikkal say? He said Kerala Bank cannot do anything to rescue Karuvannur bank. True, Kerala Bank cannot do anything because the government has tucked the bank's head underneath the RBI's armpit. Now Kerala Bank needs RBI's permission to do anything. Will RBI allow Kerala Bank to take over these loss-making societies?"

If the LDF government had listened to the UDF and desisted from the merger, the Thrissur District Cooperative Bank could have taken over the Karuvannur bank in 24 hours, Satheesan said. "So these disasters were made by the CPM-led government. The chief minister and the Department of Cooperation are not only corrupt but are also inept. People are anxious because of that," he said.

'Minister releasing fake data'
Satheesan also tore into the new report that more UDF-controlled societies had irregularities than LDF societies. The data was released by the office of the Minister for Cooperation and it was another dirty trick, he said.

It said the government found irregularities in 292 cooperative societies in Kerala. Of that, 202 societies were controlled by the UDF, the report said. "The Registrar of Cooperative Societies will not release a report identifying LDF and UDF societies. So it came from the CPM office. Also, the data did not add up to what the minister said in the Assembly to questions raised by the UDF members," he said.

The minister's statement went on to damage the reputation of the sector, Satheesan said. "Irregularities and corruption are two different things. There would be procedural irregularities in any bank. They can be corrected," he said.

He said the government initiated inquiries by a joint registrar based on a complaint by CPM local leaders and they became big news in the local editions. "Those banks were able to withstand such bad press because of the credibility of their president, board of directors, and employees," he said.

CPM resorting to strong-arm tactics to wrest UDF banks
Despite the crisis in the sector, the CPM is investing its energy in illegally taking over societies controlled by the UDF, said Satheesan. The party uses fake ID cards and with the help of police, chases away genuine voters on bank election day, he alleged. "In Pathanamthitta, the CPM took over 14 banks from the UDF, including the Thiruvalla East Service Cooperative Bank," he alleged.

Two weeks ago, during the Pathanamthitta bank election, the CPM district secretary brought in people in 32 vehicles to cast votes and create a ruckus, he said. "We were able to resist because the bank was right opposite to the DCC (District Congress Committee) office," he said.