District cooperative banks yet to commit loan to Consumerfed
Banks wary about giving loan as it would adversely affect CRR
Kochi: The meeting of representatives of the district cooperative banks called at the behest of Chief Minister Oommen Chandy to press for additional loan to the trouble department store chain Consumerfed on Friday failed to elicit a commitment from the banks.
“The secretary, department of cooperation who represented the government, made a number of suggestions which could help the banks take a positive decision,” the representative of a bank who attended the meeting said.
“It includes the payment of interest of bad debts by Consumerfed and normalising its accounts. Another was that Consumerfed make its transactions through the DCBs concerned.”
No bank made a commitment, he said, adding the boards will take a decision on the government request soon.
Representatives of Thiruvananthapuram, Kollam, Thrissur, Kozhikode and Kannur attended the meet.
The representative of Nabard, the refinancing agency for cooperative banks, is understood to have said it would be for the banks to take a decision but insisted that payment of interest alone would not make Consumerfed eligible for the loan.
Another bank said giving Rs 25 crore would adversely affect its cash reserve ratio (CRR). “We cannot risk the wrath of the Reserve Bank of India which is closely monitoring us after issuing us the license.”
With the pressure mounting from the government to enable Consumerfed run its stores for Onam, the banks will have to yield, he said.