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Banks disburse Rs 6,420 crore interest free loans to 443 sugar mills

22 Dec 2014 Evaluate

An amount of Rs 6,420 crore interest free loans have been disbursed by the banks to 443 sugar mills so that payment of sugarcane farmers can be cleared. The Cabinet Committee on Economic Affairs (CCEA) had earlier approved Rs 6,600 crore interest free loans to the sugar industry exclusively for clearing sugarcane arrears.

With a view to improve the liquidity position of sugar factories for clearing cane price arrears of previous seasons and timely settlement of cane price of current season, the government on January 3, 2014 notified the Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU). Sugar season runs from October to September. The scheme provided for moratorium period of two years, thereafter the repayment would be made over a period of three years.

State Bank of India (SBI), which is the nodal bank for SEFASU, has sanctioned loans amounting to Rs 6,616.34 crore to a total of 453 mills. Of 453 mills, 443 mills have been disbursed with an amount of Rs 6,420 crore. 130 mills in Maharashtra got loans worth Rs 2,082.21, while 89 mills in Uttar Pradesh received 1,863.73 crore.

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