Thrissur: The Karuvannur Cooperative Bank, under the control of the Communist Party of India (Marxist), continues to make headlines for all the wrong reasons. What began as a Rs 300-crore financial scandal more than two and a half years ago has now snowballed into a full-blown crisis, exposing how the ruling party has systematically turned Kerala’s cooperative banking network into its financial stronghold.
The latest twist in the saga involves a female casual employee accused of embezzling Rs 16 lakh through forged documents. According to former bank manager M. K. Murali, the woman had been diverting funds over several years, but each time she was caught, she managed to repay the amount and continue her service. Owing to her computer skills, she was entrusted with handling all digital transactions, salary disbursements, and account management, a position that gave her unchecked access to the bank’s internal systems.
Murali revealed that the discrepancies began as early as 2005, when small amounts of money started disappearing from internal accounts. In 2007, she was found to have illegally withdrawn funds from her own account; when questioned, she dismissed it as an “unintentional mistake” and returned the money. However, Murali alleges that she made multiple attempts to transfer funds into her personal accounts in subsequent years, each time taking advantage of the weak internal oversight that had become characteristic of the bank’s operations.
Crucially, her husband was reportedly closely linked to the CPM and the party-run Karshaka Sangham, which effectively functioned as the final authority in all banking decisions. Murali claimed that the couple operated with impunity because of their political connections, and that when he attempted to raise concerns about the fraud, the woman’s husband threatened to kill him if he informed the authorities. “The full depth of this fraud only came to light in 2024,” Murali stated, adding that the entire episode reflects a pattern of systemic corruption rooted in political protectionism.
The Karuvannur Cooperative Bank stands as the most glaring example of how the CPM turned Kerala’s cooperative sector into its financial fiefdom. Earlier, the Enforcement Directorate (ED) has exposed Rs 344-crore scam, naming senior CPM leaders including A. C. Moideen, P. R. Aravindakshan, and P. Rajeev for coercing officials to grant illegal loans and shielding party-linked beneficiaries.
Behind the numbers lies human misery. Depositors like Philomena Devassy, who lost her life after being denied access to her Rs 28 lakh savings, and Joshi from Thrissur, who sought euthanasia over unreleased deposits, reflect the human toll of CPM’s greed and neglect.
Murali’s testimony shows that corruption runs from the top to the teller’s desk, protected by the CPM’s web of loyal committees and cadres. Similar scams in other cooperative institutions, including Kandala Cooperative Bank, confirm that the rot extends beyond Karuvannur.
Observers say that the cooperative banking system, which once symbolised people’s financial self-reliance, has now become a parallel financial empire for the CPM, one that funds its political apparatus under the guise of rural credit operations. Out of Kerala’s 365 + cooperative banks, over 160 are reportedly in financial distress, many of them run by party loyalists rather than qualified financial professionals.
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