N.J. Nair

Loans sanctioned in violation of norms

  • The Finance Inspection Wing of conducted the inquiry
  • Action recommended against officials concerned

    THIRUVANANTHAPURAM: The Kerala State Backward Classes Development Corporation (KSBCDC) sanctioned loans amounting to Rs.83 lakh in violation of norms and incurred a loss of Rs.3 lakh by developing land in a prohibited area in the capital for constructing its head office.

    The Finance Inspection Wing of the Government detected irregularities in sanctioning Rs.50 lakh to a major community-based organisation and Rs.33,28,500 to the Bharat Sevak Samaj (BSS) under the micro-credit financing scheme. An amount of Rs.25,000 each was given under the scheme only for income-generating activity to members of the backward classes whose annual family income was less than Rs.40,000 in rural and Rs.55,000 in urban areas.

    The corporation is implementing the scheme through non-Governmental organisations using the assistance provided by the National Backward Classes Finance and Development Corporation and National Minorities Development and Finance Corporation. The implementing self-help group or NGO acts as a coordinator and takes the collective responsibility for satisfactory credit and repayment.

    The report said that the corporation managing director sanctioned Rs.50 lakh on March 29, 2003, and the amount was disbursed in two days without collecting sufficient documents from the applicant.

    The loan application was not properly filled up and the list of beneficiaries, which was a pre-requisite for sanctioning the loan, was not furnished.

    Applications rejected

    The inspection team also found in the loan approval note that applications of the Kerala Velar Service Society was rejected on the ground that the application was incomplete and the Kerala Association for Rural Development and Peace saying that it had no previous experience in lending activities.

    A sum of Rs.1,98,500 was sanctioned to the BSS - Rs.1,58,500 as loan and Rs.40,000 as grant - on March 21, 1996. The report said that the board had not authorised the managing director to sanction the grant and it was against the Memorandum of Association of the corporation. While revenue recovery proceedings were initiated against BSS for failing to repay the loan, the corporation again sanctioned Rs.31,30,000 on March 31, 2003 with a directive for repayment after a grace period of three months.

    The report said that 80.50 cents of land was identified at Kadakampally village in Thiruvananthapuram for constructing a building for the corporation head office. While the corporation was going ahead with the preliminary steps to construct the building, the city Corporation requested to furnish an NOC from the Airports Authority of India (AAI) to issue the building permit. AAI rejected the proposal.

    "Acquisition of 80.5 cents of land in a prohibited area and incurring an expenditure of Rs.3,00,000 as preliminary expenses in connection with the soil testing, structure designing, architect fee, etc. are due to lack of business forecast. Since the idea of international airport and its subsequent developments are known even to the common people, the KSBCDC's idea of constructing a multi-storeyed building in this area is wild cat scheme," the report said.

    Irregularities were detected in appointments, payments for designing website and purchase of computers and vehicles. On the basis of the report, SC/ST Development Principal Secretary Romanus Horo recommended action against the officials concerned on August 26, sources said.