Thiruvananthapuram: The financial crisis being faced by The Kerala Transport Development Finance Corporation (KTDFC) has put not only the investors into a crisis but also dragged the Kerala Bank into a logjam.
The KTDFC had borrowed Rs. 150 crore from Palakkad District Cooperative Bank and Rs. 200 crore from Ernakulam District Cooperative Bank for extending a loan of Rs 350 crore to the Kerala State Road Transport Corporation (KSRTC) in 2018. The money was borrowed for a period of 10 months. However, after the KSRTC failed to repay the loan, the KTDFC too defaulted on the repayment. Now, the KTDFC has to settle a total of Rs 480 crore, Including the interest and penal interest in these two banks. After the merging of cooperative banks to form the Kerala Bank, the restrictions imposed by the Reserve Bank of India due to these outstanding loans affected the Kerala Bank as a whole. The inspections conducted by the Reserve Bank and the National Bank for Agriculture and Rural Development (NABARD) found these outstanding loans as adverse aspects.
Citing this, the Chief Executive Officer of Kerala Bank and the Secretary to the Cooperative Department informed the authorities, including the Chief Minister, that they are facing troubles to obtain various licences from the Reserve Bank of India, permission to open NRI accounts and approval for fresh loans from NABARD.
The Chief Minister had convened a meeting in this context in April last. A decision was taken to make one-time financial assistance from the plan funds of the Transport Department and give relaxation in interest and penal interest. On the recommendation of the Chief Secretary, a relaxation of Rs. 15 crore, consisting of Rs. 67 lakh in interest and Rs. 14.33 crore in penal interest was given. However, there has been no action except holding more meetings.
A meeting attended by the Chief Minister, Transport Minister, Secretaries to the Transport, Finance and Cooperative Departments, the managing director of the KTDFC and the Chief Executive Officer of Kerala Bank was summoned on March 15. But they couldn't find a solution due to the government's financial crisis. The Chairman and Managing Director of the KSRTC, who said that there was no way out of the situation except by the government granting financial aid, suggested that the properties of the KSRTC could be handed over to government agencies such as the Life Mission and the Kerala Industrial Infrastructure Corporation (KINFRA) to raise funds for repaying the loan. There was also a suggestion at the meeting that the properties of the KSRTC could be handed over to the KTDFC. This could not be taken forward as unions in the KSRTC, including the Centre for Indian Trade Unions (CITU) opposed this proposal. With the investors approaching the KTDFC for repayment of their money, the crisis in the corporation has been accentuated.