Amid controversies over delay in payment of paddy procurement price due to farmers, Food and Civil Supplies Minister G.R. Anil told the Kerala Legislative Assembly on Wednesday that the ₹2,500 crore loan that the Supplyco availed of a consortium of banks for paddy procurement in September 2022 has not been diverted for another purpose. It has been used to repay the Paddy Receipt Sheet (PRS)-based loans of farmers amounting to ₹1,800 crore and the rest to repay the outstanding working capital loan, as per norms.
The loan was availed of a consortium consisting of State Bank of India, Federal Bank and Canara Bank. According to the Minister, the Supplyco had total liabilities amounting to ₹3,601 crore at the time of availing the loan. As per the contract, maintaining two types of loans using the same security for the same project is not allowed. Hence, all the outstanding loans in the consortium banks, including the PRS loans, were closed on priority. In this manner, PRS-linked loans of ₹1,800 crore, ₹600 crore of Working Capital Loan earlier availed of Canara Bank and Federal Bank were closed.
Mr. Anil said that the closing of the outstanding PRS-based loans ensured the availability of procurement funds for farmers in succeeding years under the PRS loan project.
