The Second World War and its after-effects led to severe food scarcity in India. In response, the Government of Madras initiated the formation of Producer-Cum-Consumer Societies (PCCS) to combat the food shortage. As part of this movement, The Madai PCCS was established on 31st July 1946.
The Madai Society provided significant relief by distributing food items at reasonable rates. In 1954–55, the government opened food item markets to the public and allowed existing PCCS organizations to register as rural banks. Consequently, The Madai Co-operative Rural Bank was officially formed on 23rd January 1956, and operations began on 19th April 1956.
Sri. P.V. Appakkutty was the founder president who led the bank until 1973. Initially serving 10 nearby villages, the bank began with 3,742 members, a capital income of ₹65,000, and an investment of ₹1,22,000.
During its early period, the bank operated its own rice mill and managed 64 fair price shops across its service area. It also procured paddy from local farmers and from Palakkad and Wayanad districts using its own lorries and tractors, playing a vital role in eliminating local food shortages.
In 1960, the bank launched its first branch at Kannapuram, making it the first primary bank in Kerala to establish a branch. The Madai Co-operative Rural Bank was also the first bank to introduce a Welfare Fund for its members, offering medical aid and financial support to the families of deceased members.
Demonstrating a strong social commitment, the bank has contributed to the construction of hospitals and schools, and continues to support economically challenged students in pursuing higher education. It honors students who excel in SSLC exams within its service area.
The bank has also assisted in funding co-operative institutions such as RAIDCO (supporting farmers), AKG Hospital (ensuring affordable healthcare), Co-op Press, Rubco, and others.
With a legacy of social responsibility and visionary leadership, the Madai Co-operative Rural Bank today stands as the co-operative bank with the highest deposits and loan-to-value working capital in Kerala.