Kerala - Thiruvananthapuram   

Cooperative sector to tackle credit crunch

THIRUVANANTHAPURAM: Major realtors and certain corporate companies in the State are turning to the cooperative sector for financial assistance to fund their projects in the wake of the economic slowdown.

Banking sector sources told The Hindu that the requests for housing loans from individuals and construction companies were steadily pouring in. This shift of customers from the commercial banking sector to the cooperative sector has been cited as a fallout of the economic slump.

Commercial banks were not entertaining the requests to fund major projects following a slump in the housing sector of late. The Kerala State Cooperative Bank (KSCB) had been getting requests from realtors and individuals, for housing loans, in an unprecedented manner, sources said.

Certain corporate majors had also sought assistance and participation in their new projects. The bank is understood to have got applications for projects up to Rs.50 crore and above.

The Kerala State Transport Corporation (KSRTC) had sought a loan to the tune of Rs.60 crore to launch a new fleet of buses.

The Centre for Development Studies (CDS) which was commissioned by the government to study the impact of recession on the State had recommended a proactive role for the cooperative sector to help in tiding over the crisis. The bank had been seriously mulling various options to extend its services to the new clientele and capitalise the crisis, sources said.

The bank had launched an intensive drive to bring down the rate of non-performing assets (NPAs) from the current 22 per cent to 15 per cent. A two-pronged strategy had been adopted to bring down NPAs — crackdown on defaulters and strict adherence to parameters in giving credit. Fresh requests would be cleared only after considering the financial viability of the projects, sources said.

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