Ballari: Nearly 80 per cent of the 67 sponge iron mills in Karnataka have either been shut down or are on the verge of closure due to shortage of iron ore since the Supreme Court banned iron ore mining in the state in July 2011 according to Mr T. Srinivas Rao, president, Karnataka Sponge Iron Manufacturers Association (KSIMA).
“Over the last four years we have made several representations to the state and Union governments seeking a relief package for small steel plants, but have received no response. Now banks are in no mood to help us either,” he said. Confirming this, industry insiders alleged that high-level contacts and commissions mattered when it came to ‘compromise settlement’ with banks.
According to documents available with DC, SBI has approved VS Lad and Sons’ compromise settlement of Rs 30 crore against the outstanding loan of Rs 70.91 crore and total dues of Rs 148.63 crore. It has approved VSL Steels’ compromise settlement of Rs 44 crore against an outstanding of Rs 39.91 crore and dues of Rs 61.11 crore “SBI has offered a uniform waiver package for mining dependent industries in Goa after the mining ban. It’s good that it has waived off a portion of the loan amount and interest to some companies in Karnataka too, but the bank is not showing the same consideration to other NPA plants in the state which are in the same boat. Instead of adopting a common policy, the bank is discriminating among borrowers without reason,” alleged prominent industrialist, Hothur Mohammed Iqbal who is now fighting for a waiver of interest for his sick industry. But Ms Seethalakshmi Iyer, assistant general manager, stressed assets management branch, SBI, Bengaluru said when contacted, “We go by the decision of the State Level Banker Committee which takes a final call on who should or should not be given a loan or interest waiver.”
