TSCSC to liquidate food credit outstanding with SBI

Corporation gives an in principle approval pending clearance of government

The Telangana State Civil Supplies Corporation Limited (TSCSCL) has agreed in principle to liquidate the food credit advances it availed from the public sector lender State Bank of India.

The Corporation, however, did not specify the date by which the process will be completed. The Corporation reportedly gave this assurance to the Food Credit Standing Committee (FCSC) of the SBI, which convened a high level meeting of the civil supplies corporations of Telangana and Andhra Pradesh here on Thursday.

The meeting follows a letter addressed by the SBI to the State government last month asking the latter to bestow personal attention and arrange for liquidation of the food credit accounts due by the State government. The SBI said the Reserve Bank of India (RBI), in its guidelines, had asked the banks to treat these loans as potential non-performing loans.

Inadequate cover

The RBI, according to senior officials, gave the direction as it opined that the stock of food grains against which these loans were extended were not adequate to cover the value of the loan. The SBI said, in its letter, that while the interest in respect of the FC accounts was being serviced from time to time, it was observed that the position of stocks and outstanding was running almost static for the past few years. “The position revealed is not satisfactory as the account is overdue for liquidation now,” the SBI said.

The State officials who attended the FCSC meeting said that though they were ready to liquidate the FC account, they needed to take the concurrence of the State government before communicating the schedule of repayment.

Bank’s assurance

The SBI, it is learnt, had insisted that the TS Civil Supplies Corporation clear the outstanding before the end of the financial year so that it can avail new loans.

In the process, it had assured that the bank was prepared to complete the formalities and sanction new loans within a week if the Corporation was prepared to liquidate the outstanding. The officials of the two States are also understood to have agreed to apportion the subsidy released by the Centre from time to time in line with the norms set at the time of de-merger of the erstwhile civil supplies corporation in the united State.