Maharashtra Cabinet eases loan conditions for co-operative sugar factories

It was also stipulated that the entire board of directors of co-operative sugar factories would bear collective responsibility for loan repayment

Mumbai: The state cabinet on Sunday modified the norms for government guarantees on loans to co-operative sugar factories, relaxing the requirement for a no-objection certificate (NOC) from lender banks when applying for subsequent loans. This decision was made despite objections from the finance department. The cabinet also stipulated that, in addition to personal responsibility, the entire board of directors of co-operative sugar factories would bear collective responsibility for loan repayment.

File photo of Malegaon sugar co-operative in Baramati in Maharashtra.(Satish Bate/HT photo)

In a significant concession to co-operative sugar factories seeking second loans, the state cabinet abolished the condition of obtaining NOCs from lender banks. The finance department, in its remarks on the proposal, opposed this concession, stating, "In the absence of an NOC from the lender bank, if the co-operative sugar factory fails to repay the earlier loan, the responsibility to repay will fall on the state government as it has guaranteed that loan."

Despite this objection, the state cabinet approved the cancellation of the provision mandating co-operative sugar factories to obtain NOCs from lender banks.

For co-operative sugar factory loans, the respective board directors must submit personal bonds before loan disbursement. Now, in addition to the personal responsibility of directors, the entire board will bear collective responsibility for loan repayment.

The state cabinet also decided on Sunday to establish a 'Senior Citizens Welfare Corporation' to provide social security to the more than 1.5 crore senior citizens in the state. This decision aims to protect the state's elderly against the challenges of old age, illness, and disability, and provide them with financial assistance. The corporation will be headquartered in Mumbai with a share capital of ₹50 crore.

Furthermore, the cabinet approved an increase in the honorarium for Asha workers' group promoters by ₹4,000 per month.