Thiruvananthapuram: A consortium of banks led by SBI has agreed to lend Rs 3,127 crore to Kerala State Road Transport Corporation (KSRTC) to tide over the current financial crisis. The loan, with a 20-year tenor, carries an interest rate of 9 per cent.
The loan will be used to restructure the Corporation's Rs 2,996-crore loans taken from the consortium of banks, Kerala Transport Development Finance Corporation (KTDFC), district cooperative banks and other financial institutions over the years. The consortium consists of SBI, South Indian Bank, Canara Bank and KTDFC.
While SBI's exposure stands at Rs 1,000 crore, SIB and Canara Bank will lend Rs 500 crore each. Rest will be from KTDFC. Though, the banks charge an interest rate of 9 per cent, loan from KTDFC carries 11.8 per cent interest rate. However, the financial burden for the amount over 9 per cent to the KTDFC will be borne by the government.
As of now, KSRTC pays Rs 3 crore for loan daily. The plan is to bring it down to Rs 84 lakh so that the monthly repayment is reduced by Rs 62 crore. Most of the present loans carry a high interest rate of 16.25 per cent.
The enhanced cash flow would be channeled by the KSRTC for paying salary and allowances to the 36,000-odd employees, pension to the 38,000 retirees, apart from meeting the fuel bill and honouring other commitments and also for expansion of fleet. SBI Capital Markets Ltd (SBI CAP) is the consultancy for the loan.
