Adsul Asks SBI, IBA To Arrange Funds For Sugar Factories Bailout

Mumbai, Nov 14: | Updated: Nov 15 2003, 05:30am hrs
Union minister of state for finance Anandrao Adsul on Friday asked the State Bank of India (SBI) and Indian Banks Association (IBA) to make arrangements for Rs 300 crore to bail out the twelve sugar mills in Maharashtra, which were clients of the banned Apex Bank of urban cooperative banks of Maharashtra and Goa Ltd. SBI and IBA will now hold discussions on November 16 for extending credit facility.

"We have to find a way to provide credit for the current crushing season to them," said Mr Adsul.

He was in the city on Friday to meet the chairman of the state-owned banks and insurance companies to sort out a few politically sensitive issues.

He met Bank of Baroda chairman and managing director PS Shenoy, Life Insurance Corporation chairman SB Mathur and New India Assurance chairman and managing director Rajendra Beri.

Explaining the necessity of funding by SBI and other banks, Mr Adsul said the Maharashtra State Co-operative Bank had shown willingness to takeover existing loans of sugar units and also extend fresh assistance, but the Reserve Bank of India had declined to give permission as the cooperative bank had already reached the ceiling for extending credit facility to these sugar units.

Earlier RBI deputy governor Vepa Kamesam had suggested that assistance of state-run banks should be sought for providing Rs 300 crore credit to them. And accordingly, a meeting of the chairmen of IBA and SBI has been convened on Sunday to work out the modalities, said Mr Adsul.

The license of Mumbai-headquartered Apex Bank which is registered under the Multi State Co-operative Act (1984) was cancelled by the RBI on the basis of a Supreme Court directive on October 30.

The minister, who holds the portfolio of banking and insurance also asked LIC to resolve the issue of increasing the rent of its properties amicably with tenants.