Maharashtra govt eases loan terms for cooperative sugar mills | Mumbai News

Mumbai: The state government on Sunday amended the norms of government guarantees on loans to cooperative sugar mills, relaxing the requirement of a no-objection certificate (NOC) from lending banks while applying for subsequent loans. The move was taken despite objections from the finance ministry. The government also stipulated that in addition to personal liability, the entire board of directors of cooperative sugar mills would bear collective responsibility for repayment of loans.

In a major concession to cooperative sugar mills seeking a second loan, the state cabinet has removed the condition of obtaining an NOC from the lending banks. The finance ministry, in its observations on the proposal, opposed the concession, saying: “In the absence of an NOC from the lending bank, if the cooperative sugar mill fails to repay the previous loan, the liability of repayment will be on the state government as it has guaranteed the loan.”

Despite this objection, the state cabinet approved the cancellation of the provision requiring cooperative sugar mills to obtain NOCs from lending banks.

For loans to cooperative sugar mills, the respective directors must submit personal guarantees before the loan is disbursed. Now, in addition to the personal liability of the directors, the entire board of directors will bear the collective responsibility for the repayment of the loan.

The state cabinet on Sunday also decided to set up a ‘Senior Citizens Welfare Society’ to provide social security to the over 1.5 crore senior citizens in the state. The move aims to protect the state’s senior citizens from the challenges of old age, illness and disability and provide them with financial assistance. The society will be headquartered in Mumbai with a share capital of ₹50 crores.

In addition, the cabinet approved an increase in the fees of the promoters of the Asha workers group by ₹4,000 per month.