Chief Minister J Jayalalithaa on Monday announced a six-month extension of the scheme to waive off interest, penalty interest and a number of other measures to boost the loan recovery rate of housing cooperative societies. The waivers are aimed at extending the government’s attempts to pull the cooperative societies out of the limbo caused by unpaid dues.
The waivers would apply to the Tamil Nadu Cooperative Housing Federation (TNCHF) and its affiliated 619 urban and 197 rural cooperative housing societies. The societies had worked themselves into a financially tight spot as guarantors for home loans taken by members from various financial agencies such as LIC, HUDCO, National Housing Bank and commercial and cooperative banks.
With the societies having to pay the instalments on behalf of defaulters, their combined outstanding loans had raked up to `2,136 crore. The previous DMK government had in 2009 issued an order to the societies to stop facilitating anymore loans till they had recovered all their outstanding ones.
“As a result of this, the housing cooperative societies had been pushed into a state of inactivity. Even those societies that were functioning properly had been affected. They are now in a state when they are not even able to pay the salaries of their employees,” said Jayalalithaa, making an announcement in the Assembly under Rule 110 of the Tamil Nadu Assembly Rules, which allow for announcements without debate on the floor of the House.
Jayalalithaa informed the Assembly that a slew of waivers introduced by her government last year had succeeded in reducing the outstanding loans of the TNHCF from `2,136 crore to `1,280 crore, by making it attractive for allottees to make payments to bridge their defaults and receive sale deeds.
Jayalalithaa announced that the scheme would be extended by another six months to further narrow the outstanding loans.
In all, Jayalalithaa said, 34,863 members of housing cooperatives had benefitted from the waivers, which amounted to `317.06 crore. Penalty waivers amounted to `196.26 crore while the State government bore interest waivers to the tune of `120.78. As a result of this, loan recoveries of the housing cooperatives rose from two per cent to 32 per cent.
Jayalalithaa also announced that 72 housing cooperatives had cleared all their outstanding loans, and that they would restart loan disbursement immediately. While 699 societies had managed up to 50 per cent recoveries, 51 had recovered between 51 and 99 per cent of their outstanding loans.
The waiver schemes, which were implemented at various rates for different income slabs, saw the collection of `633.73 crore in principal, `673.67 crore in interest and `543.1 crore in interest penalty.
Jayalalithaa announced that the government would set aside `269.21 crore for the extension of the waiver scheme.