Govt to waive interest to recover PSIDC’s loans

Ruchika M Khanna

Tribune News Service

Chandigarh, August 1

The state government is all set to bring a one-time settlement (OTS) scheme for the loanees of the Punjab State Industrial Development Corporation (PSIDC) wherein a major portion of the interest component will be waived. But the government’s loss-making corporation will be able to recover barely 9 per cent of its total losses.

While the policy will be applicable to all those loss-making industrial units who have defaulted in repaying loans to the PSIDC, the profit-making companies or profit-making sister concerns of the defaulters can avail the OTS only after their case has been examined and approved by a Cabinet sub-committee, which will be formed to look into cases of those industrialists, who despite making huge profits have defaulted on repaying loans.

Sources in the industry and finance departments have confirmed that the policy is ready and will be presented before the state Cabinet, which meets on Monday, for its final approval.

The government is hoping that of Rs2,100 crore default in loans, the new policy will help recover over Rs200 crore. The total accumulated loss of the PSIDC is estimated at Rs7,300 crore. A roadmap for getting the PSIDC out of the financial mess is also being considered wherein another Rs300 crore could be mopped up through liquidation and disinvestment of companies owned by the PSIDC and sale of some of its fixed assets.

It is learnt that the Industry Department had proposed that all those opting for the OTS policy would be asked to pay a much smaller rate of interest (10- 12 per cent) than levied on them at the time of loan disbursal (18-24 per cent). This was done to make the OTS more attractive for defaulters and ensure higher recovery of dues. However, the Finance Department has shot down this proposal and said the new rate of interest would be applicable only from the date when the loanee went into default.

“We were apprehending that in case the lower rate of interest was levied right from the beginning of the loan account in this OTS, the recovery would be negligible. Thus, we decided to change the original proposal,” said a source in the Finance Department.

Under the new scheme, defaulters would be categorised in various groups based on tangible collateral security given by them at the time of availing loans. While some defaulters, who had given a tangible security, will be charged 12 per cent interest, others (who had not given any tangible security) will be charged 10 per cent interest.

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