Mumbai: Panel formed to fix payment as guarantee for bank loans

The Maharashtra government has formed a six-member committee, which will be headed by the principal secretary of the Finance Department (financial reforms), to finalise the amount admissible to Maharashtra State Cooperative Bank (MSCB) for the Government Guarantees given by it to the loans sanctioned to various cooperative banks and other cooperative societies, including cooperative sugar factories. The government provides a guarantee to cooperative bodies to avail a loan from MSCB.

The committee’s mandate is to fix the total amount, including principal and interest, towards the government guarantee payable to MSCB, which is an apex cooperative bank in the state.

The Department of Cooperation and Marketing desk officer Prashant Pimpale, on Thursday, issued the government resolution. The committee has been asked to submit its report to the state government in three months.

The committee will also decide the government’s payment towards the guarantee to Nanded District Central Cooperative Bank, Osmanabad District Central Cooperative Bank and Mumbai District Central Cooperative Bank. Further, the committee will fix the time period in which the government will make the payment towards its guarantee to these banks after the amount is finalised.

A senior department officer told Free Press Journal, ''The government's move is important. It was found out that many cooperative banks, who avail loans due to government guarantee, have either become bankrupt or financially weak to stay afloat. The government is the guarantor and faces the brunt. Therefore, the committee will fix the guarantee amount, including principal and interest, so that it can be cleared subsequently.''

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Free Press Journal