Palai Central Bank - Political Fallout

Political Fallout

When one looks now at the forced closure of an institution like Palai Central Bank, one sees it as a political failure too. Today, if the Central Government considers the closure of an institution (or even its shifting or merger or modification), all-party delegations of MPs and Ministers are seen rushing to Delhi to ensure that no such decision is taken. But way back in 1960, when the nation was barely 13 years into its independent status, the MPs and MLAs and even the Ministers were far less effective. When the largest institution of Kerala was being ordered to be closed by a Central Government agency, Kerala’s politicians could not prevent it but had to meekly abide by the dictates of their national leadership. The people of central Kerala, however, felt abandoned, if not betrayed.

There was also another aspect. The Bank was considered to be an institution of the Christian community, although members of every religion and community were present among the Bank’s innumerable account holders, employees, advisors and well-wishers. Today, if an institution of a minority community is touched by the Government, that community would create such a furore that anyone will think twice before taking a step forward. But minorities were much less aware of their rights way back in 1960. The Christian community, therefore, suffered in silence then.

In 1964, barely 3 years after the closure of Palai Central Bank, a major upheaval occurred in the Congress Party in Kerala. Fifteen of its MLAs – mainly those from central Kerala – split and formed a new party by name Kerala Congress. It was the beginning of a change in the political equations in the State. The closure of Palai Central Bank is considered by many to be one of the root causes that led to the new chain of events.

In the same year, under an ingenious scheme which came to be known as ‘Kamaraj Plan’, the irrepressible Desai was removed from the Union Cabinet.