Kerala government announces one-time settlement scheme for debt-ridden private processors in cashew sector

The Industries department has announced a one-time settlement scheme for debt-ridden private processors in the cashew sector.

As part of a revival package, the interest for loans up to ₹10 crore will be completely written off, and entrepreneurs who have taken loans up to ₹2 crore from various banks can close them by paying 50% of the principal. Those who have taken loans to the tune of ₹2 crore to ₹10 crore are required to repay 60% of the principal.

According to State Level Bankers’ Committee (SLBC) officials, about ₹500 crore will have to be written off as part of the settlement formula, said a note issued by the office of the Industries Minister. Accounts declared as non-performing assets till March 31, 2020 can avail itself of the exemption.

Repayment proposal

Banks will be provided time till February 28, 2022 to submit the repayment proposal based on the formula. Ten percent of the amount should be paid as the first instalment within this time. The processors can repay the loan within one year after the proposal is approved. Apart from processors, the government has extended the scheme to traders as well.

The government had initiated steps for the preparation of a package to revive the crisis-hit private sector in 2019. As part of this, a meeting chaired Chief Minister Pinarayi Vijayan was convened on March 2, 2020.

Interest-free loans and provision to restructure their loans were also announced to support the private processors in the last two Budgets. The government later appointed a three-member committee comprising the SLBC convener, government representative and the representative of the processors to formulate the one-time settlement plan.

“After the second Left Democratic Front government assumed office, the committee met six times in the presence of Industries Minister P. Rajeeve and once in the presence of Finance Minister K.N. Balagopal on the instructions of the Chief Minister. The final agreement was reached after various efforts to strike a deal on the formulas put forward by the banks and the processors. The current formula will be a relief to the debt-ridden cashew processors in the private sector,” said the Minister.

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Printable version | May 18, 2022 1:45:58 pm |