PANJIM: The government, which is in a fix after it failed to convince the Reserve Bank of India to get banks to waive off a portion of the mining loans, has to now use the money from the sale of the e-auctioned ore to bail out truck, barge and machinery owners.
The Economic Development Corporation (EDC) which will be the vehicle through which the government intends to formulate a scheme where the borrowers would be provided soft loans for clearing their outstanding loans with the banks. It is also in dark over the issue.
In July, Chief Minister Manohar had said that if the banks agree to waive off interest and give a one-time settlement to pay the loan, the government intends to shift the liabilities to the Economic Development Corporation (EDC) or through some corporation which will offer them soft loans to pay off the principal loan amount to the banks. This was confirmed by EDC officials who said that the government had initial plan of taking over the loans of these people through it and the corporation was even asked to raise the funds; but then there was a sudden change in decision.
EDC Managing Director Satish Bhat refusing to speak on why EDC did not take over the loan scheme said “It’s a government decision. We have been made the nodal agency in implementing the present scheme.”
This is in contrast to the earlier position when Bhat had told Herald that “The government has plans to take over loan of these people, but nothing has been worked out so far, as bankers have not come up with their proposals.”
Bhat had said that a comprehensive plan would be chalked out only after bankers agree to waive off the interest and allow a one time settlement for borrowers.
However, Saturday media reports confirmed that the state’s proposal was rejected by the top management of the banking regulatory authority of the country soon after the government sent the proposal and the decision has since been conveyed to the state government. Probably this resulted in the modified government proposal given that it became incumbent on the state to raise funds to write off the loans, as banks would not be allowed to write off any loan as it did not fit the criteria laid down in banking rules.
As on March 2014, of the nearly 214 barge loans (covering around 150 barges) the total dues are Rs 340 crore with additional Rs 80 crore interest of which Rs 228 crore have become NPAs.
In case of truck loans, of the 4,745 accounts (with over 6,500 trucks) of the total outstanding dues of Rs 370.29 crore with another Rs 120 crore interest, Rs 165.77 crore have turned NPAs.
Another Rs 880 crore (including interest) is the loan liability of those including mining machinery, other mining-related machinery and equipment, small shops and hotels and ancillary businesses.
