Revival package for cashew sector this month

In a move that could give much-needed support to the crisis-ridden cashew industry, a cashew revival package will be implemented this month.

Published: 07th February 2019 05:06 AM  |   Last Updated: 07th February 2019 05:06 AM   |  A+A-

By Express News Service

THIRUVANANTHAPURAM:  In a move that could give much-needed support to the crisis-ridden cashew industry, a cashew revival package will be implemented this month. The state government is also coming up with a host of measures to support the sector. A high level meeting of banks called by Chief Minister Pinarayi Vijayan has decided to introduce unified interest rate at 9 per cent for new loans and exempt penal interest on existing loans.

Also, the government will pay interest on new loans for one year. The meeting decided to come up with a special package to reopen cashew factories facing major crisis. It was also decided to supply cashew to revived units through the Kerala Cashew Board. 

The issue of 58 units, recommended for one-time settlement, will be re-examined. The meeting observed these units can be revived with low-interest loans. The government has earmarked `25 crore in the budget to provide interest on new loans for a year. The government will provide interest subsidy on loans irrespective of the loan amount. 

A decision on six companies was earlier referred to the Asset Restructuring Committee. The meeting decided to urge the banks concerned to review the decision. Five of these companies had taken loan from Federal Bank and one from South Indian Bank. Pinarayi announced one-year moratorium on state taxes for crisis-ridden units. Also, the state will urge the Centre to clear central arrears on provident fund and ESI. 

Representatives of banks who attended the meeting accepted the state government’s suggestion to give further loans to 50 factories before February  28. Proceedings of the revival package for the remaining units will be completed before March 15. In another decision, the meeting decided to give one more opportunity to those who failed to submit their proposals before the committee concerned. As many as 175 units had presented their case before the committee comprising representatives from the government and State Level Bankers Committee.

The government-appointed panel had come to the conclusion as many as 76 units – with a total liability of Rs 218 crore – can restart operations if financial assistance is given. Another 35 units – with a liability of Rs 216 crore – can be revived if existing loans are converted to long-term loans and interest rates are reduced. 

At the meeting, Pinarayi proposed banks should bring in certain relaxations in their stance on collateral security. Also pending accounts should be regularised. He said the government wants to take effective steps to revive the cashew industry and banks should take a favourable approach.The state government has been taking various measures to support the cashew industry in which more than 3 lakh people are working. The revival package has been implemented as part of this move. More than 400 cashew factories, majority of which is in Kollam, were closed down. 

In addition to Fisheries and Cashew Minister J Mercykutty Amma, the meeting was attended by Chief Secretary Tom Jose, Finance secretary Manoj Joshy, SLBC convener G K Maya of Canara Bank and Kerala Cashew Board CMD P Marapandyan.

Loans to 50 factories before February 28

The representatives of banks who attended the meeting accepted the state government’s suggestion to give further loans to 50 factories before February  28. Proceedings of the revival package for the remaining units will be completed before March 15. Pinarayi also urged banks to bring in certain relaxations in their stance on collateral security

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