The bank has also revised conversion cost of sugar from Rs 250 per quintal to Rs 200 per quintal and short-term loan recoveries from Rs 200 per quintal to Rs 250 per quintal for sugarmills.
Maharashtra State Cooperative (MSC) Bank –the nodal bodyforall cooperative banks in the state, has revised loan amounts given to sugar mills on the pledged sugar stocks from 90% to 85%. The bank has also revised conversion cost of sugar from Rs 250 per quintal to Rs 200 per quintal and short-term loan recoveries from Rs 200 per quintal to Rs 250 per quintal for sugarmills.
Jaiprakash Dandegaonkar, chairman, Maharashtra State Cooperative Sugar Factories Federation (MSCSFF)has written to the bank urging reconsideration.
Vidyadhar Anaskar, chairman of the board of administrators, MSC Bank,said:“Sugar mills in the state were in financial distress last year due to drought and flood conditions. The state Cabinet had come forward urging the bank to increase the pledge loan amount, and therefore, the bank revised the loan amount from usual 85% to 90% of the pledged stocks.” “During the previous season, sugar prices were fluctuating as a result of which the bank was forced to revise sugar valuations from time to time.”
“As the Centre has fixed the minimum support price (MSP) of sugar at Rs 3,100 per quintal, prices are stable.The bank has, therefore, decided to restore the pledge loan amounts to 85%,”Anaskar said.
Sanjay Khatal, MD, MSCSFF, said sugar sales are low because of a high inventory, and a bumper crop is expected this season. Millers will be unable to pay the fair and remunerative price (FRP) to farmers which has been hiked by the Centre,he said.
According to millers, if the pledge loan amounts to 85% of the total stocks,cooperative banks will provide millers Rs 2,635 per quintal as the loan amount. The maximum amount available to mills for FRP payment will then be around Rs 1,700 perquintal.
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