Supplyco gets nod to borrow another Rs 800 cr for paddy procurement

KR Prahladan

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Representational Image | Photo: ANI

Kottayam: The Kerala finance department has approved an additional loan of Rs 800 crore from a consortium of banks for paddy procurement, despite concerns that Supplyco may have exceeded its loan limit. Agriculture minister GR Anil has stated that there are no longer any financial obstacles to procuring paddy.

When a receipt of paddy procurement is submitted to the bank, the amount is given to the farmer as a loan, which is later repaid by Supplyco to the bank. Banks have received legal advice indicating that there are no hindrances in granting new loans to Supplyco.

As of Thursday, Supplyco has procured paddy worth Rs 1,109 crore, with Rs 702 crore already disbursed to farmers and Rs 406 crore still pending. The second phase of harvesting is nearing completion, and an additional Rs 1,000 crore may be required for procurement. The union government has already paid Rs 350 crores in two phases, but the state government is yet to give its share of Rs 750 crore.

Previously, a consortium of banks had provided a loan of Rs 2,500 crore for procurement, with 90% of it being entered in the banks' books as repayment of old loans. Kerala Bank has also sanctioned a loan of Rs 200 crore to settle arrears from the first phase, but by that time, Supplyco had already exceeded its loan limit.

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Representative Image / Photo: KK Santhosh

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