THIRUVANANTHAPURAM: The loan settlement adalat of Kerala Financial Corporation gave approval for closing 376 NPAs which would fetch Rs 215 crore. The first-ever onetime settlement adalat was organised by the KFC as part of its effort to clean up the balance sheet and become a professional and responsible financier.
Retired district judge Satheesh Chandra Babu presided over the adalat held over two days. KFC’s NPA burden is Rs 700 crore from 2,000 accounts. The maximum number of bad loans sanctioned for settlement was in Thiruvananthapuram: 126 for an amount of `60 crore.
A couple of applications rejected at the adalat will be considered by the next director board to examine the possibility of a more relaxed offer. Meanwhile, the corporation’s earlier announcement to transfer the remaining NPAs to an asset reconstruction company may not materialise. Sources said the ARCs are reluctant to operate in Kerala owing to the huge registration charge levied by the government on transfers.
Kerala charges 10 percent registration fees while most other states have fixed the upper ceiling of registration fees at Rs 1 lakh. In the absence of an asset reconstruction company, the corporation will have to opt for recovery steps on its own. It is crucial for the corporation to clear its NPAs to secure low-cost funds.