PANJIM: Chief Minister Manohar Parrikar on Wednesday ruled out the possibility of restructuring the 35% government subsidy offer and take over of 100% loan liabilities of borrowers who had taken mining loans. He said those who want to avail of the government’s debt relief scheme should raise the balance amount of 65 percent. The total loan exposure of this category is Rs 900 crore.
He said that the government proposal is to give a 35 percent subsidy of their loan settlement amount provided the balance is cleared.
“Despite being in economic distress and at a time when the mining sector is not contributing anything, we are ready to sacrifice for the people who are suffering. What else more can we do?” he said, adding that government is providing monthly financial benefit of Rs 12,000 to truck owners for the past two years.
Parrikar said that those who cannot afford to pay the balance 65 percent of the settlement amount are free to sell their assets such as trucks, barges and machinery to raise the money. “If not then let them not apply for benefit under the scheme. But from the government side there won’t be any changes in the scheme. No government has done so much for people who are suffering,” he said.
Addressing media persons Wednesday afternoon, Parrikar said that nationalized and cooperative banks have agreed for one-time settlement (OTS) on the principle amount by giving an interest waiver.
“The Reserve Bank of India has no role to play here. They have given clear direction to banks under their 1995 regulations stating it is not within the scope of the RBI, but it is an individual bank’s decision,” he said adding that he had already written to RBI’s Panjim branch about giving flexibility to banks to compromise with the borrowers on case-to-case basis, regarding OTS or restructuring of loan.
“The banks such as Syndicate and Canara have given OTS to their borrowers in the past and the same can be followed now,” Chief Minister said, adding that 95 per cent cases of mining-related borrowers have become non-performing assets.
Parrikar would be holding meeting with bank representatives next week, when they are expected to submit their OTS proposals. Total loan exposure is around Rs 900 crore, with nationalized banks having Rs 569 crore exposure, he said.
The Debt Relief Scheme for mining-affected borrowers of financial institution offers a ceiling of Rs 15 lakh for truck owners, Rs 25 lakh for mining machinery owners and Rs 35 lakh for barge owners, as a subsidy against the total loan settlement amount, provided the loans were taken before September 30, 2012. Government has made provision of Rs 400 crore for the scheme.
u Government says no to taking over 100% loan liability; borrowers have to raise 65% balance amount on their own.
u CM says that RBI has no role to play in OTS, and banks are ready with the proposals.
u Total loan exposure is Rs 900 cr.
