Cooperative bank seeks 22 cr from state for late loan repayment

The Maharashtra State Cooperative Central Bank (MSCCB) and the state government are at loggerheads over outstanding amount of interest on bank guarantee given in loans to sugar mills under the control of politicians from various parties

MUMBAI: The Maharashtra State Cooperative Central Bank (MSCCB) and the state government are at loggerheads over outstanding amount of interest on loans given to sugar mills under the control of politicians, for which the government had stood as guarantor. The MSCCB has moved the Supreme Court for recovery of ₹22 crore as outstanding interest while the state government has disputed the amount and has appointed a committee to study it.

Cooperative bank seeks 22 cr from state for late loan repayment

The Maharashtra government had stood as guarantor to loans given to 60 sugar factories and 15 spinning mills, between 2002 and 2012, under the control of politicians from Congress and Nationalist Congress Party. Many of the sugar factories failed to repay the loans taken from MSCCB, the apex cooperative bank, thus putting the onus of the repayment on the state government. The MSCCB, in 2011, moved the Supreme Court for the recovery of ₹1117.13 crore towards the outstanding loans and interest.

After hearing the case for over seven years, the Supreme Court in 2019 directed the state government to pay ₹1049.41 crore to the apex bank, as the state government stood as guarantor. The government made the payment but late because of the pandemic. The apex bank has now moved for the recovery of ₹22.19 crore towards the interest accumulated on the delayed payment.

“The bank has filed an interim application in the petition pending with the SC for the recovery. We are surprised with the amount quoted as it could not be this high even though there was a delay in the payment. To study the claim and the way to contest it in the apex court, a 4-member committee under Rajgopal Devara, additional chief secretary, planning department, has been formed,” said an official from the cooperation department.

The officer also said the government had already given a proposal to the MSCCB to withdraw the pending petition in the SC by taking ₹200 crore as compensation. “The apex bank, however, refused,” he said. He further said that the liability towards the outstanding loan is expected to mount. “None of the 12 sugar factories, that obtained loans of over ₹2000 crore in the last one year, has paid back. The onus would be on the state government to repay the loans taken from MSCCB and National Cooperative Development Cooperation,” he added.