Kerala Co-operative Bank Files High Court Petition Against State Software Proposal
The Kallettumkara Service Co-operative Bank, based in Chalakudy, has initiated legal action by filing a petition before the Kerala High Court. The petition challenges the Request for Proposal (RFP) issued by the Registrar of Co-operative Societies, which aims to select a consortium for providing a uniform software application to primary agricultural credit societies (PACS).
Allegations of Excessive Government Control and Constitutional Violation
The petitioners have raised serious concerns regarding the RFP dated November 3, 2025. They allege that this proposal would facilitate the daily extraction of all financial data from primary societies to a state-controlled data centre. According to the bank, this would result in unprecedented government oversight over the internal financial administration of these societies, effectively undermining their autonomy.
The petition contends that such measures violate Article 43B of the Constitution, which pertains to the promotion of cooperative societies. It is argued that the proposed software exceeds the permissible limits of supervisory jurisdiction as outlined in the Kerala Co-operative Societies Act, thereby threatening the independent functioning of these institutions.
Background on Previous Software Attempts and Alleged Favoritism
The petitioners highlighted that an earlier attempt by the state government to procure similar software from TSC had collapsed after the agency withdrew from the proposal. They further alleged that there is now a move to extend the option to Dinesh Information Technology Systems (DITS), which they describe as a government-favoured entity. This shift has raised questions about transparency and fairness in the selection process.
Financial Burden on Already Distressed Societies
Another critical issue raised in the petition is the financial implications for the primary agricultural credit societies. While the government has limited its financial liability to a pilot project covering only 280 PACS branches, the substantial cost of implementing the software statewide is proposed to be borne by the PACS themselves. Many of these societies are already financially distressed, making this additional burden particularly concerning.
Comparison with National-Level Software and Surveillance Concerns
The petition pointed out that the state's insistence on an expensive, monopoly software is arbitrary, especially given the availability of alternatives. The Ministry of Cooperation, through NABARD, has introduced a free and optional national-level common software for PACS, which has been adopted by almost all states across India.
Unlike the central software, which requires transmission of only summary data on statutory demand, Kerala's proposed system mandates continuous surveillance. This distinction has fueled fears of overreach and unnecessary intrusion into the daily operations of the societies.
Implications for Cooperative Autonomy and Future Steps
The case underscores a broader debate about the balance between government supervision and the autonomy of cooperative societies. The Kallettumkara bank's legal challenge seeks to protect the independence of PACS from what it perceives as excessive state control. The outcome of this petition could set a significant precedent for how cooperative societies in Kerala and potentially other states manage their software and data governance in the future.
