Loss-making KTDFC requests state govt to repay Rs 350 crore loan issued to KSRTC

Thiruvananthapuram: Kerala Transport Development Finance Corporation (KTDFC) told the state government that it was unable to pay dividends to investors due to a pending loan with Kerala State Road Transport Corporation (KSRTC). In a letter addressed to the government, KTDFC pointed out it issued loans to KSRTC based on the state government guarantee. Therefore, the government is obliged to pay back the total dues of Rs 350 crore issued to KSRTC. Government or KSRTC must repay the amount, the finance corporation said.

Meanwhile, a decision will be taken by the Finance Department later this week. 

Many investors, including Sree Rama Krishna Mission, approached the Reserve Bank of India (RBI), reporting KTDFC had failed to return their deposits. KTDFC owes Rs 25 crore to Sree Rama Krishna Mission alone. The RBI informed KTDFC and investors that government was responsible for paying the amount.

KTDFC was formed to issue loans to KSRTC. In 2018, to overcome KSRTC's increasing financial burden, the government signed an agreement with a consortium of banks for a long-term loan worth Rs 3,127 crore. Ahead of this, to clear the pending dues, KTDFC issued a loan of Rs 350 crore to KSRTC. However, KTDFC claimed that KSRTC was yet to pack back this amount. 

Meanwhile, Transport Minister Antony Raju denied KTDFC's claim and added that KSRTC owes money only to the bank consortium. 

As a result, KTDFC ended up as a loss-making enterprise, and RBI barred the financial entity from receiving any investments. In FYs 2021/22 and 2022/23, KTDFC suffered losses of Rs 50 crore and Rs 80 crore, respectively. Though it was decided to hand over certain KSRTC properties to the KTDFC to make up the loan, there has been no action.