Kollam: Despite promises given by the State Government on implementing a cashew industry revival package by July 31, no favourable move has been taken yet by the banks to support the cashew processors who were declared non-performing assets (NPA).
The banks had assured to provide refinancing and other measures in a meeting held under cashew minister J. Mercykkutty Amma in July first week and a government order was also issued on the issue on July 6.
"The Canara Bank, Federal Bank, and South Indian Bank had agreed upon the condition of the proposed cashew industry revival package. The Canara Bank is supporting only by enhancing loans but not on refinance. Federal Bank, that had agreed to refinance five accounts, still kept it in pending," K. Rajesh, president, Cashew Industry Protection Council."Disregarding the government order to hold back recovery procedures, the banks still move on with coercive moves. The Syndicate Bank in Kollam initiated a recovery from a cashew firm some two days back," Mr. Rajesh added.
The minister in a meeting held in July with State Level Bankers' Committee and the private cashew processors had finalised the strategies for funding the processing units to restart their mechanism.
As per the revival package, the penalty for defaults in current loans by the processors will be avoided. It has been planned in the revival package to give provision to repay existing bank loans and working capital in instalments for a revised interest rate of 9 per cent on a long term basis.
The interest rate fixed at 9 per cent for new loans will be repaid by the government. The interest subsidy has been planned for a year now but would consider an extension if necessary.