The account of the public sector Kerala State Cashew Development Corporation (KSCDC) with the Axis Bank branch here has been frozen.
The bank authorities informed the KSCDC management that the step had been taken with effect on Wednesday on directions from the Reserve Bank of India.
The KSCDC has Rs.35 lakh deposited in the account.
The KSCDC has an outstanding debt of Rs.99 crore to be paid to three banks — State Bank of India, State Bank of Travancore, and Punjab National Bank.
These public sector banks had jointly approached the Debts Recovery Tribunal as part of a formal process when the KSCDC erred in repayment.