The Kerala government’s plan to leverage cooperative banks for providing short-term credit to the ordinary people may not come to fruition as Nabard is not willing to shell out refinance for the cooperative sector.
The State govt’s own failure to strengthen the Primary Cooperative Banks (PCBs) in the state has only compounded the situation.
Sources familiar with the cooperative banking sector say if the NABARD does not pitch in with adequate fund for the State’s cooperative sector , small and medium farmers, traders and others who depend on the cooperative banks may get exposed to the perils of private moneylenders.
Against the 7 percent interest of cooperative banks, the private moneylenders extort interest up to 120 percent, sources add.
Experts say if a drive against loan sharks is to be a success, there is no alternative to putting in solid efforts to strengthen cooperative banks including primary cooperative banks.