Kerala Bank-led consortium to boost paddy procurement

Alathur: A consortium of cooperative banks, led by Kerala Bank, is being formed not only to raise funds for paddy procurement but also for procuring paddy. This is with the launch of a rice mill in Kerala Paddy Procurement Processing and Marketing Cooperative Society (KAPCOS) in Kidangoor, Kottayam, next year. From here, branded rice and value-added products will be out to the market. There are also plans to make cooperative mills in Alappuzha and Palakkad Kannambra more effective in their operations.

The National Bank for Agriculture and Rural Development, NABARD had sanctioned Rs 80 crore for the construction of the cooperative rice mill in Kottayam. The project, which comes under the special attention project from the Minister for Cooperation, V N Vasavan, is progressing rapidly.

The consortium aimed at procuring paddy has invited applications from the 50 cooperative societies in the state. From this 20 cooperative societies will be included in the consortium. As per the plan, the consortium will directly procure the paddy and give amount directly. This will include groups with a strong investment and lending network and financial base, with a deposit of at least Rs 100 crore in Kerala Bank.

Since the Kerala Bank provided a PRS loan until 2022, the Kerala State Civil Supplies Corporation, Supplyco, still owes Rs 737 crore in loan payments. This amount will be found by the cooperative consortium. This amount will be found by the cooperative consortium.

The Kerala Bank could provide new PRS loans, as per Reserve Bank guidelines only if the old loan interest is paid. After Kerala Bank was delisted in 2022, the PRS loans were provided by a consortium comprising SBI, Kerala Bank and Federal Bank. Of this, Supplyco also has a loan repayment liability of Rs 2,500 crore. Federal Bank later withdrew from the consortium. The existing consortium and the cooperative consortium will operate in two parts.