CPI(M)-backed Islamic Bank depositors in fix as plaints mount; Kerala CM Satheesan promises probe

Kannur: A financial headache is brewing for depositors of a Sharia-compliant cooperative society promoted by CPI(M) leaders in Kannur, with complaints surfacing that depositors have been unable to withdraw their money. Chief Minister V.D. Satheesan has assured that the complaints will be investigated.

However, in a development that adds a twist to the controversy, Nassar, one of the depositors who had openly raised the issue, has now said that his deposit of Rs 1 lakh has been returned.

He had earlier said that repeated attempts to recover the money had failed and that he had been unable to get a response from M. Shajar, the key promoter of the institution.

“I tried calling Shajar, but he is not answering the call. I have no other option but to seek redress through legal means,” Nassar had said.

The issue came to the government’s notice on Thursday after T.K. Govindan, the MLA from Thaliparamba, handed over complaints from depositors in the Mayyil area to Chief Minister Satheesan.

Govindan said several complainants had approached him after facing difficulties in getting back their deposits.

“After going through the complaints I submitted, the Chief Minister said that a probe would be launched,” Govindan said.

Govindan also said he was aware that concerns over the institution had first surfaced in the Mayyil CPI(M) unit and were subsequently discussed before the Kannur district CPI(M) committee.

The issue assumes political significance as Govindan was himself a prominent CPI(M) leader in Kannur until the recent Assembly election.

He contested Thaliparamba as an Independent after the party decided to field the wife of State CPI(M) Secretary M.V. Govindan.

With the Congress-led UDF supporting him, Govindan secured a notable victory.

Halal Fayida Cooperative Society, a Sharia-compliant financial institution, was inaugurated by then Chief Minister Pinarayi Vijayan in Kannur on December 24, 2017, in the presence of senior CPI(M) leaders from the district.

M. Shajar, a prominent CPI(M) leader who rose through the party’s youth wing, was its chief promoter.

The institution had its roots in the CPI(M)-led effort to promote Islamic banking in Kerala.

The LDF government’s earlier attempt to establish an Islamic bank during 2006-11 had faced objections from the Reserve Bank of India, which maintained that the proposal was inconsistent with existing banking laws.

The initiative was subsequently pursued through a cooperative society structure outside the direct regulatory framework governing conventional banks.

Primary cooperative societies operate under the State cooperative system, although many accept public deposits and provide loans.

The model was projected as a means of bringing people seeking Sharia-compliant financial arrangements into the formal financial system.

While Nassar’s Rs 1 lakh has now been returned, complaints from other depositors have brought the institution back into the political spotlight.

The proposed probe will now have to establish whether the difficulties faced by depositors are isolated instances or point to a wider financial problem.

For the CPI(M), particularly its Kannur organisation, the controversy is an uncomfortable reminder of an initiative once promoted with considerable political backing

IANS