Kochi: Chief Minister Ommen Chandy has called a meeting of the heads of six district cooperative banks on Friday in an effort to persuade them to lend Rs 25 crore each to the troubled cooperative consumer store chain Consumerfed.
The meeting comes in the wake of the unwillingness expressed by the Thiruvananthapuram, Kollam, Pathanathitta, Thrissur, Kozhikode and Kannur DCBs to lend more money to Consumerfed.
In a meeting held last week at the behest of the chief minister, the government had asked the banks to help out Consumerfed by lending Rs 25 crore each so that it can pay off part of the arrears to its suppliers and get ready for the Onam season.
Consumerfed runs Triveni, Neethi and Nama stores across the state, selling essential commodities at discounted prices.
Kollam DCB president K C Rajan told Deccan Chronicle that employees of the bank have moved the High Court, asking for a direction to the bank not to concede the government’s demand.
“The case is posted for next week and our lawyer has asked us to take a decision only on the basis of the court order,” Mr Rajan said. “We have also received a directive from Nabard not to lend to Consumeerfed as it also could turn a bad debt.”
The state government had in May had decided that it would stand guarantee to the loans the DCBs would give Consumerfed.
However, the DCBs, most of whom have already burnt their fingers after lending to the chain, have resisted the pressure from the government.
Consumerfed has been facing a tough time running the stores as suppliers, who claim their arrears have crossed Rs 400 crore, have stopped replenishing the stocks.
