The state government of Maharashtra has set up a higher-level committee, led by principal secretary (monetary reforms) Rajgopal Deora to ascertain the precise quantity to be paid to cooperative banks that had issued loans to numerous cooperative sugar and spinning mills in spite of damaging NDR (net disposable resource).
The government had stood in as the guarantor for the loans considering the fact that the RBI and NABARD norms clearly state that mills with damaging NDR can not be offered loans.
As a lot of as 57 cooperative banks had taken loans from the Maharashtra State Cooperative Bank (MSCB), Mumbai Bank and Nanded and Osmanabad district central cooperative banks exactly where the government was the guarantor and had failed to repay the loans.
As the mills defaulted in payments, the government will now repay these loans, AR Deshmukh, MD, Maharashtra State Cooperative Bank, and one of the members of the committee mentioned. According to senior officials, the quantity performs out to practically Rs 3,000 crore.
Over the last handful of years, drought and decreasing sugar sales have impacted the monetary wellness of sugar mills, which are now not in a position to raise new capital from the banks. The Maharashtra State Cooperative Sugar Factories Federation has repeatedly asked the state government to stand assure for such mills so that they could raise fresh finance from banks. The state government, in turn, had asked mills for a proposal to take into account their pleas to grant government assure, so that they are in a position to raise capital for the upcoming season.