Kerala’s cooperatives are planning to take on big banks by merging into a single bank called Kerala Co-operative Bank (KCB). It’s a massive project and a first of its kind in India. If all goes as planned, 15 financial institutions (14 district cooperative banks and a state-level bank), which have branches across the state, will form the largest scheduled cooperative bank in the country. Together, the structure will sit on a deposit base of Rs110,000 crore, and hold 30% market share of total banking transactions in Kerala, becoming the state’s second-biggest bank, next only to State Bank Group.
Partly controlled by the government, cooperatives in Kerala have a long history of shaping a society where almost everyone has access to institutional credit. They handle an estimated 70% of the state’s total agricultural credit, have a significant reserve of gold, and often hand out money to fuel regional development—for instance, they gave a Rs470 crore loan to build a metro service in Ernakulam district.
Tasked by the government, M.S. Sriram, a professor at the public policy department, Indian Institute of Management (IIM), Bengaluru, just developed a roadmap for the KCB project.