4% fee on primary cooperative bank loans

Chief Minister Oommen Chandy has frozen an order issued by the Taxes Department on September 20 imposing a four per cent registration fee on loans from primary cooperative banks by mortgaging their property, from Tuesday.

As per cooperative norms, loanees should register the details of the property document they mortgaged with the bank with the Registration Department to secure a loan. The document will be released on closing the loan without levying any fee. The latest order said loanees would need to pay two per cent of the loan amount as registration fee to secure a loan and another two per cent to get the documents released.

The government had amended the Kerala Cooperative Societies Amendment Act in 2003 and said that those taking loans from primary cooperative societies need not pay the registration fee. The order was frozen on the basis of letters written by Cooperation Minister C.N. Balakrishnan to Mr. Chandy, Finance Minister K.M. Mani, and Registration Minister Anoop Jacob.

CPI(M) State secretary Pinarayi Vijayan had also asked the government to repeal the order as it went against the interests of the cooperative sector and the common man.