Wants one-time settlement from UP Financial Corporation.
The Small Industries Development Bank of India (Sidbi) is negotiating with the Uttar Pradesh government for one-time settlement of long pending dues on the UP Financial Corporation (UPFC).
UPFC has substantial non performing assets (NPAs) and its loans to industrial units, especially small and medium enterprises, has hardly been recovered. This has made it difficult for the corporation to repay Sidbi, which had been advancing credit to it.
“UPFC stopped servicing the Sidbi loan 3-4 years ago and the principal amount itself stands at Rs 375 crore at present,” an official source told Business Standard.
Since, statutory liquidity ratio bonds are guaranteed 75-80 per cent by the government, Sidbi is negotiating to settle for OTS amounting to 75 per cent of the outstanding, the source informed.
“Sidbi has been urging the state government for settlement of these dues and there have been quite a few meetings in this regard,” he added. A similar meeting is likely to be held tomorrow in the state capital here with senior government officials.
UPFC provides financial assistance to industrial and service sector units, especially SMEs, under its refinance scheme for technology development and modernisation.
It also provides working capital to a host of industries at competitive rates. However, the recovery by the UPFC has been poor, partly due to the SME sector facing problems due to the slowdown.
