Kollam: In a blow to the efforts to revive the sinking cashew industry, the banks allegedly proceeded with recovery measures despite the assurance given in a meeting convened by the Chief Minister. The banks are still adamant on taking coercive action against the companies that have been declared non-performing assets (NPA) by selling their assets to asset restructuring companies. Kerala cashew industry joint protest council will siege the Canara Bank regional office in Ramankulangara here on Wednesday.
"In a meeting convened by the Chief Minister on November 7, it has been unanimously agreed by the banks and State level bankers committee (SLBC) that no recovery actions will be taken in case of defaulters. A 4-member committee had been constituted then. However, the RBI representative has backed off from the committee keeping the entire efforts hang in uncertainty," said K. Rajesh, state convenor of the council.
According to the council, the Canara Bank had published an advertisement on November 10, claiming possession of assets of five factories in Kollam. All these factories had been declared NPA earlier.
The move is despite the assurance given by the Government extending support to the private sector by agreeing to pump in money to support the industry. The Government had already allocated Rs. 20 crore in the budget for private cashew sector.
The committee formed was entitled to scrutinise each account that has been declared non-performing asset (NPA) finding possibilities of restructuring the financial liabilities with the banks. The entire NPA accounts should be scrutinised before November 30 and report to be submitted by December 15, according to the instruction given by the Government.
With the banks sabotaging the revival efforts, the entrepreneurs have lost their chances to get fresh loans as additional working capital to restart the industry that has come to a grinding halt.
Some 160 entrepreneurs are in trouble as their endeavours have been declared NPA by the banks.
Around 700 out of 834 registered cashew factories are closed due to huge operational costs that eventually led to accrued loss of these firms.
