The argument that cooperative banks should function under RBI's complete control was against democratic nature of the cooperative banks, he said.
Pointing out that the cooperative sector was functioning in a transparent manner, he said RBI can examine their records, but the central bank will not be allowed take control of their functioning, Vijayan said.
The cooperative sector in the state was facing a severe crisis following demonetisation as these institutions were not being allowed to exchange old notes and accept deposits.
BJP in Kerala had alleged that cooperative institutions in the state were 'hub' of blackmoney.
"There is no black money here. Anyone can examine the same. RBI and Enforcement can examine," Vijayan said.
The chief minister also said banks in the state should be prepared to help district banks. NABARD also should extend all help to the cooperative sector, he said adding government was also prepared to help.
Meanwhile, government also decided to allow primary cooperative society members, who were finding it difficult to withdraw cash following demonetisation, to withdraw cash up to Rs 24,000 a week from district cooperative banks.
It also decided to make KYC mandatory for opening accounts in primary cooperative banks.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)