Tamil Nadu on Sunday asked the centre to allow a cooperative society with lakhs of customers in southern India to resume taking deposits and operate as a universal bank, exempting it from a home ministry ban and central bank guidelines.
REPCO Bank was established in 1969 to help rehabilitate repatriates from Sri Lanka and Burma, but suffered a setback in 2014 when the central registrar of cooperative societies amended rules on credit societies taking deposits.
REPCO has a 49.34 per cent share capital from the central government and the remaining from Kerala, Karnataka and Andhra Pradesh and repatriates. It has a turnover of around Rs 14,200 crore and 10 lakh customers.
The home ministry last year asked REPCO to discontinue accepting deposits from 'B' Class members—people who are not repatriates--based on a notification issued by the Central Registrar of Cooperative Societies, which comes under the agriculture ministry. The notification was partly based on a judgment of the Supreme Court last year.
Tamil Nadu Chief Minister Edappadi K Palaniswami on Sunday gave a memorandum to Prime Minister Narendra Modi in Madurai, saying the Supreme Court judgment was for a private multi-state cooperative society and need not be taken as a mandatory direction for all such lenders.
Repco Micro Finance last year submitted a proposal for getting a licence as Small Finance Bank, but the Reserve Bank of India told it only applications for universal banks were being considered.