THIRUVANANTHAPURAM: Cooperation minister Kadakampally Surendran on Monday said the reports that the state government had written off Rubco’s bad debt as part of the formation of Kerala Bank were baseless. He said Rubco should pay the loan amount with interest to the government instead of Kerala Bank for which agreement is to be signed. And it is not right to club the incident with the Chief Minister’s Distress Relief Fund, he said.
Earlier, Kadakampally had claimed Rubco’s bad debt to the tune of Rs 238 crore along with Rs 41 crore of Rubber Market and Rs 27 crore of Marketfed were paid by the state government after reaching an understanding with agencies concerned. But the minister on Monday said the MoU to be signed with government and agencies was being reviewed by the Law Department.
The decision to pay the bad debt of Rubco by the state government was taken in January and the Cabinet had given permission for this in its last meeting. The state government had also reached an agreement with Rubco and other institutions with regard to the principal amount and interest to be paid to the state government and its tenure. The main obstacle raised by the Reserve Bank of India for the formation of Kerala Bank by merging the district cooperative banks with the state cooperative bank was the big bad debt of state cooperative bank.