GVMC looking for second tranche of loan

Bank of India has released Rs. 90 crores of the Rs 100-crore loan already sanctioned by it

Having taken a loan of Rs.100 crore from Bank of India to finance the ongoing massive works under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), the Greater Visakhapatnam Municipal Corporation is looking for another tranche.

The GVMC had in the beginning proposed a Rs.200-crore loan and obtained the State Government's permission. Following several rounds of discussion with banks and financial institutions, it clinched a deal with the Bank of India. It had entered into a memorandum of understanding (MoU) for Rs.100-crore loan last month of which Rs.90 crores had been released.

The Bank of India offered the loan to the civic body at 8.25 per cent. The corporation running into arrears for the JNNURM works had disbursed the Rs.90 crores released.

Now it is planning to get the remaining Rs.100 crores from another bank. “Since we have gone in for an MoU for only Rs.100 crores with the Bank of India, we are free to negotiate with other banks,” explains an official of the GVMC. “We have an offer for a lower interest rate and are exploring it,” he added. The interest rate is likely to be decided in a week. The total requirement towards the JNNURM share is estimated at Rs.250 crores as of now. After the fresh loan (of Rs.100 crores), the total will come to Rs.200 crores while the remaining Rs.50 crore will be mobilised internally.


The GVMC had earlier borrowed Rs.65 crores as its share for construction of the lift irrigation scheme on the Godavari at Kateru near Rajahmundry. The last instalment of Rs.26 crores, including interest, will be deposited by March.

The corporation in its efforts to contribute the 30 per cent share for the Rs.1,800 crore JNNURM works had borrowed Rs.70 crores from the LIC and the half-yearly interest on it works out to Rs.3.8 crore.

  • Bank of India loan obtained at 8.25 pc interest, the second tranche is on offer for lower rate
  • Of the total requirement of Rs. 250 crores, GVMC to mobilise Rs. 50 crores internally

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