With banks initiating procedures to attach around 25 factories, private cashew processors in Kollam are confronting yet another crisis.
The Industries Department had earlier announced a one-time settlement (OTS) scheme along with a revival package to support the processors. As per the formula, interest for loans up to ₹10 crore was to be completely written off and processors who had taken loans up to ₹2 crore could close the loan by paying 50% of the principal.
“While no steps have been taken to implement the OTS scheme, the banks are proceeding with measures, including foreclosure. At present, no assistance is given to the processors who are struggling and the interest waiver announced by the government remains only on paper. We want the banks to stop their retaliatory measures,” says Nizamudeen I. , president, Federation of Cashew Processors and Exporters.
While Kerala has nearly 800 registered cashew processing units, not even half of them are functioning now. According to the processors, very few banks are willing to restructure their loans despite the State government’s intervention. They also allege that the banks are not ensuring a fair value for their assets so that they are not required to refund any balance after recovering the dues.
“Most of us are looking for prospective buyers, but the process takes time. We are ready to sell everything we own in order to avoid attachment but the banks are not willing to cooperate. They are selling assets worth ₹40 crore for half the money through e-auctions. We are sure that the property can fetch a better price,” says a factory owner.
The processors say they are expecting a foreclosure spree after Onam as the banks are going ahead with steps to attach packing centres and factories by forcibly evicting workers.
According to the Industries Department, nearly ₹500 crore was to be written off as part of the settlement. “But the banks are opting to ignore the government order and the revenue recovery procedures are progressing. At present, everything depends on the attitude of the banks. In order to revive this crisis-hit industry, the government should come up with a package and directly deal with issues,” says the processors.
