Kerala govt to take Rs 2,000 cr loan from cooperative societies to pay social security pension

Thiruvananthapuram: The Kerala government will soon take a loan of Rs 2,000 crore from cooperative societies to pay social security pensions. The finance department has given permission to form a new consortium of cooperative societies for this purpose. Madai Co-Operative Rural Bank LTD of Kannur district will be the fund manager of the consortium. Cooperatives can become members of this consortium.

The government has taken loans by forming such consortiums in the past. Earlier, Mannarkkad Rural Service Cooperative Bank was the fund manager. The loan will be taken at an interest rate of 8.8 per cent per annum for six months under government guarantee. If the money is not returned after six months, the loan will be renewed. The consortium will not have permanent members. Cooperatives can leave the consortium anytime and new societies may join.

The loan is being taken by Kerala Social Security Pension Limited (KSSPL), which was formed to distribute social security pensions. Currently, the pension for the months of August and September is pending.

The union government has informed Kerala that loans of KSSPL will be considered as state debt. Kerala has protested against the decision and has been mulling legal recourse against the union finance ministry.