Kottayam: If all goes as planned, Kerala Bank is set to take over full responsibility for paddy procurement as early as the next harvesting season. A new procurement structure is being formulated involving Kerala Bank, its affiliated cooperative societies (under a consortium), and Supplyco.

In a meeting held recently in the presence of the Chief Minister, a decision was made to raise funds from 58 primary cooperative societies to help Kerala Bank clear its existing dues of ₹882 crore to Supplyco. These societies, each with assets worth ₹100 crore or more, will form a consortium to finance the repayment. Once Kerala Bank clears its debt, it will in turn fund Supplyco, which will then repay the cooperative consortium.

Currently, banks like SBI, Canara Bank and Federal Bank have extended loans worth around ₹3,200 crore to fund the paddy procurement and processing. Supplyco is now preparing to repay this amount in the next phase.

Out of the ₹2,601 crore owed by the Central Government to Kerala for the rice processed and supplied through the Public Distribution System (PDS), it is expected that ₹1,200 crore will be released soon. This amount will be used to partially repay the bank consortium’s loans. Gradually, Kerala Bank will take over the liabilities of the other banks as well.

Civil Supplies Minister G R Anil stated that future paddy procurement operations will be fully managed through this new arrangement. Cooperation Minister V N Vasavan confirmed that Kerala Bank is ready to assume full responsibility.