THIRUVANANTHAPURAM: In a major relief to the cash-strapped KSRTC, the government and the public transporter signed an agreement with the consortium of banks and the KTDFC for a long-term loan worth Rs 3,127 crore. The SBI, South Indian Bank, Canara Bank and KTDFC are the financial institutions providing the bailout to the corporation.
While the SBI will provide Rs 1,000 crore, Canara Bank and South Indian Bank will each chip in with
Rs 500 crore. All the three banks will charge interest at the rate of nine per cent. However, unconfirmed reports say the KTDFC is providing loan worthRs 1,127 crore at the rate of 11.8 per cent. Transport Minister A K Saseendran told Express the average interest rate will be around 9.2 per cent only and the interest burden on the KSRTC will come down from over Rs 3 crore to just 78 lakh daily.
“It will help to address the KSRTC’s financial burden to a great extent. The KSRTC can manage its fund constraints once the funds at lower interest rate become available. The KSRTC could have an additional Rs 65-70 crore at its disposal every month. The major gap between the revenue and expenditure can indeed be bridged,” he said.
Earlier, the government had claimed the consortium of banks will be providing loan at 9 per cent interest for a period of 20 years.
It should be noted here the KTDFC, which was constituted to service the KSRTC’s financial requirements, had in a way turned out to be its liquidator by forcing it to avail huge loans at higher interest rate. The KTDFC has again been made part of the consortium granting loans at a higher interest rate.