THIRUVANANTHAPURAM: As part of its efforts to break the impasse on timely distribution of welfare pensions, the state government has accorded sanction to form a consortium of primary cooperative societies (PCS) and other credit societies to mobilise funds to the tune of Rs 2,000 crore for providing loan to Kerala Social Security Pension Ltd (KSSP).
The government has assured cooperative and credit societies that it will stand guarantee for the amount borrowed. The credit societies include primary agricultural cooperative societies and employee cooperative societies. The government has also decided to designate Madayi Cooperative Rural Bank Ltd, Kannur, as the fund manager of the social security pension. The rate of interest on loan has been fixed at 8.8% per annum on a monthly basis. A government order in this regard was issued on Wednesday.
The decision comes after the finance principal secretary requested the government to mobilise funds worth `2,000 crore. KSSP has been constituted under the provision of the Companies Act to ensure uninterrupted disbursal of social security pension.
Loan: Coop societies registrar to monitor disbursal, repayment
The fund manager will sign an agreement with KSSP covering the tenure, interest payment schedule and repayment schedule of the loan. The registrar of cooperative societies will open a joint pool account in Kerala Bank with Madayi Cooperative Rural Bank, the fund manager, for the purpose of pooling the consortium fund. The registrar should closely monitor the loan disbursement process and repayment by the company, and should periodically report it to the government. The principal amount would be repaid as a bullet payment on maturity.
The government has also accorded sanction to the registrar of cooperative societies to permit the primary agricultural credit societies to release loans to Social Security Pension Ltd after they comply with the direction. The tenure of the loan is fixed as 12 months and will be renewed thereafter on mutual agreement if necessary. It would be renewed with an interest rate of 8.80% per annum on a monthly basis.