EDC wants to take over mining loans but only if banks waive off all interest; Rs 150 crore provision in last Budget to make stake holders ‘debt free’ paltry; Truck owners the only ones to have received debt assistance package
TEAM HERALD
PANJIM: Twenty-two months down the line, much has been talked about as when the iron ore mining sector in Goa would gain its originality, but the D-day is far way. Hence the focus now needs to be on the survival of those one lakh-odd people, who are fighting for their livelihood and on the other hand fighting a monetary battle with the banking sector, who are now looking for recovery of their loan amounts, pending since September 2012.
It’s high time this government shifts its focus towards the loan liability of people dependent on mining activity which comes to around Rs 1,792 crore, of which Rs 400 crore is the value of Non-Performing Assets (NPAs) as on March 2014 through various banks, including nationalized, cooperative and urban banks.
While the Co-operative sector banks have already turned down government proposal to waive off full loan interest and the nationalized banks are planning to follow suit, these mining stakeholders are in lurch due to unclear polices of the Government, who had promised to make them debt free.
The Parrikar government in its Budget 2014-15 had assured to come out with an amicable solution to settle the loan accounts of these dependents. A provision of Rs 150 crore was made to make the sector debt free.
However, in the absence of proper proposal from the bankers and financial companies, who have been asked to waive off full loan interest and provide one time settlement (OTS) of loan amount, the Government too finds itself helpless.
The Economic Development Corporation (EDC), through which Government intends to formulate a scheme, wherein the borrowers would be provided loan through Corporation for clearing their outstanding loans with the banks, is also in dark over the issue. “The Government has plans in regards to taking over loan of these people but nothing has been worked out so far as bankers have not come up with their proposals,” EDC Managing Director Satish Bhat told Herald.
Bhat said that a comprehensive plan would be chalked out only after bankers agree to waive off interest and allow one time settlement to borrowers.
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, 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.
A senior official attached with the Goa Cooperative Bank said that the bank is ready to provide 50 percent relief in terms of waiver of interest and partial waiver of principal as in their case, the NPA position had crossed over 60 per cent. “We cannot wait any more now. Government needs to act or we would be forced to take action against the borrowers,” the official said.
The All Goa Barge Owners Association (AGBOA) general secretary Atul Jadav said, “we have full faith in government but want it to act fast as the time is running out”. He said that in absence of any financial support provided to us unlike the truck operators, the situation has worsened.
Government in March 2013 announced financial relief to the truck owners and those left unemployed. It has so far dispersed about Rs 100 crore under the scheme, the amount that was used by truck operators to clear off their loans.
As per the truck operators, their loan outstandings is down by Rs 200 crore, thanks partly to the government’s special package and the moratorium imposed by the banks till March 31. “It is a fact that no interest has been charged from September 2012 on trucks and machines as per RBI’s instruction. The banks were told not to charge interest if the borrowers are willing to settle,” South Goa Truck Operators Association president Laxman Dessai said.
Loan Outstanding as on March 2014
Total loan: Rs 1,792 crore, of which Rs 400 crore is NPAs (as on March 2014) through various banks, including nationalized, cooperative and urban banks
Category Loan accounts Loan outstanding
Trucks 4,745 accounts (with over 6,500 trucks) 370.29 crore with another Rs 120 crore interest
Barges 214 barge loans (covering around 150 barges 340 crore with additional 80 crores interest
Machinery operators and others —– 880 crores including interest
Government has plans in regards to taking over loan of these people but nothing has been worked out so far as bankers have not come up with their proposals
EDC managing director, Satish Bhat
The Cooperative Bank maintains that it is ready to give 50 percent relief in terms of waiver of interest and partial waiver of principal.
