MSCSFF requests an extension for disbursement of soft loan

Kolhapur: The government had introduced various measures, including a soft loan scheme for sugar mills to help them clear mounting cane arrears. But, millers in Maharashtra are finding it difficult to avail the scheme.

In a letter written to Department of Food and Public Distribution (DFPD) on May 17, 2019, Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) requested an extension for disbursement of soft loan by two months up to 31st July 2019.

MSCSFF MD, Sanjay Khatal, said that 94 Sugar mills had submitted their soft loan Proposals to the Maharashtra State Cooperative Bank (MSCB) and District Cooperative Banks (DCBs) to avail the soft loan. However, the mills are unable to get the soft loan due to following reasons:
1. Exhaustion of Sectoral Exposure Limit (40 per cent of Landable Resources) as well as Unit Exposure Limit (50 per cent of capital funds) by individual banks.
2. Exhaustion of individual Co.Op Sugar Mill’s Borrowing Limit. This has to be settled by the state government by permitting additional borrowing.
3. Those sugar mills having NPA, Negative NDR and Negative Net worth are not able to get the loan without Default Guarantee of State Government.
4. The banks need to take the approval from NABARD in case of Negative NDR.

“As per the NABARD instructions, the MSCB and DCBs have individually submitted the proposals to the NABARD for enhancing the unit and Sectoral Exposure Limits”, MSCSFF further added.

MSCSFF has requested the NABARD chairman to review the problems for suitable remedial measures as a matter of policy intervention.


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