KSRTC gets ₹100-crore loan from KDCB

Bank employees oppose it, but government stands guarantee

The Kannur District Cooperative Bank’s (KDCB) hasty disbursal of ₹100 crore as advances to the Kerala State Road Transport Corporation (KSRTC), amid protests by bank’s employees and officers, followed an order issued by the State government to help the KSRTC secure the loan reportedly to pay last month’s salaries.

Kannur KDCB authorities said that though some bank employees and officers expressed their reservations about sanctioning ₹100 crore as loan to the KSRTC which has been in the red, the State government stood as guarantor to the bank by issuing the order in this regard. The bank, being under the administrative control of the Joint Registrar of Cooperative Societies now, could not refuse to sanction the loan when the government was the guarantor, they said.

“The loan was sanctioned on June 12 following the order and the amount was disbursed on June 13,” said KDCB General Manager A.K. Purushothaman. When contacted, he told

The Hindu that the loan was sanctioned to the KSRTC for seven years at 12% interest rate. The bank had adequate funds for lending the amount, he said.

According to reports, the bank witnessed dramatic developments over the past two days as senior managers in the lending section went on leave to evade responsibility of granting the loan to the KSRTC. The loan was sanctioned by hastening the procedures allegedly to make it discreet to avert any open protest by the bank’s staff. The decision to sanction the loan to the KSRTC by the DCB in Pathanamthitta was stayed by the High Court on a petition by its employees, according to sources in the bank.

The KDCB authorities said the two DCBs in the State had earlier sanctioned loans to the KSRTC and the latter was properly repaying the loan amount. They said the KDCB sanctioned working capital loan to the KSRTC.