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Trust Deficit

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By Shivanand Pandit

The connection between the selected managers of cooperatives and political parties is not unique in India. Such backing is common in many states and has frequently been the reason for banks going broke. The state of Maharashtra was in the news for the same reason, and now, it is the turn of God’s Own Country or Kerala.

At the end of December 2021, all cooperative banks in Kerala reported Non-Performing Assets (NPAs) amounting to Rs 20,324 crore which is approximately 38% of the loans and advances. A majority of these cooperative banks are managed by the ruling Left Democratic Front (LDF) government in the state.

According to the State Level Bankers’ Committee’s report, NPAs of Kerala State Cooperative Agricultural and Rural Development Bank Limited and Kerala State Cooperative Bank were 88% and 30% of advances, respectively. The same report points out that commercial banks, comprising PSU and private…

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