Despite the Kerala government’s assurances that cooperative sector depositors won’t incur any losses, recent developments suggest otherwise. Cooperative banks in Kerala’s attempt to provide financial aid to the Karuvannur Bank, which was hit by a scam, faced obstacles when the state government declined to guarantee the loans. Additionally, the Kerala Cooperative Deposit Guarantee Fund Board, which ensures savings in cooperative banks, currently only provides a security cover of Rs 1 lakh. Deposit guarantees have not been increased to Rs 5 lakhs as of yet. Similar cases, such as the Puthur Service Co Op Bank, highlight the risks faced by depositors in Kerala’s cooperative sector.