Prodded by the Reserve Bank of India to recover their non-performing assets (NPA), the banking sector is targeting a part of Rs 1,274 crore sanctioned by the government to the private sector players in power and cement against their sunk investments in coal blocks. These blocks were developed but were later taken away under the Supreme Court ruling on deallocation.
According to coal ministry reports, about Rs 1,274 crore have been sanctioned and some of it has been disbursed to several companies till May this year.
Of this, Rs 19.25 crore and Rs 17.55 crore was allocated to Prism Cement and Prakash Industries, respectively, in May alone with respect to Chotia and Sial Ghogri blocks previously owned by them.
While Prism Cement has been performing well, Prakash Industries, engaged in the business of ferroalloys and TMT bars and PVC pipes, has been struggling to repay debts.
Corporation Bank, which lent money to Prakash Industries, had lodged its claim against the mine. But luckily for Prakash, Corp Bank lodged its claim well past the deadline of February 2016.
As per Coal Mines Special Provisions Act 2015, claims were invited from secured creditors with respect to dues from developers of Schedule 1 mines. In another instance, Madhya Pradesh State Mining Corp has been sanctioned Rs 4.13 crore in May against costs incurred for development of Bicharpur mine.
Of this, State Bank of India —the country’s largest state-run lender — had claimed Rs 2.51 crore, which has also been dismissed as the bank had actually lent money to an equipment supplier and not the block owner directly.
However, not every previous block owners have been lucky.
Punjab National Bank has been able to get the entire amount of Rs 13.50 crore in March payable by Hindalco, the current owner of the mine Gare Palma IV/4, to the previous owner Jayaswal Neco Industries against the bank’s outstanding loan of Rs 76.22 crore.
It’s not only banks but other government agencies as well that have claimed part of the compensation against past dues.
Gupta Metallics and Gupta Coalfields were sanctioned in March Rs 11.68 crores against which Rs 8.80 crore would be paid becuase Directorate of Geology and Mining has demanded payment of Rs 2.35 crore.
And, State Bank of India earlier got Rs 8.54 crore in December against Rs 10.59 crore given as loan for development of Ardhagram coal block jointly owned by Sova Ispat and Jai Balaji Sponge.
SEEKING FUNDS
- About Rs 1,274 crore have been sanctioned and some of it has been disbursed to several companies
- Prism Cement got Rs 19.25 crore while Prakash Industries received Rs 17.55 crore
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