The civic body has restructured its loan outstanding of ₹1,348 crore, with State Bank of India (SBI) taking over most of the portfolio and charging a lesser rate of interest.
At present, all the loans are with Housing and Urban Development Corporation (HUDCO) at an interest rate of 10.15%. Of this, SBI will take over ₹986 crore and charge interest at the rate of 8.10%.
“This restructuring will save ₹124.9 crore for the civic body because of the difference in the rate of interest,” said M.K. Gunashekhar, Chairman, Standing Committee for Taxation and Finance, BBMP.
Mr. Gunashekhar said 11 banks showed interest when the civic body invited bids for loan restructuring. HUDCO also participated and bid for a rate of interest of 9.50%.
“Of the 11 banks, the lowest rate of interest was being charged by SBI, which was further brought down to 8.10%. We will sign an MoU with SBI,” he said.
Meanwhile, as the valuation of the properties pledged have gone up, BBMP has successfully got back Malleswaram market from HUDCO. It had been pledged to HUDCO, along with Johnson Market and Dasappa Hospital building, for a loan in 2012. Some time ago, BBMP had got back Johnson Market from HUDCO.
