While proposal was presented by F&CC last year,documentation for keeping two zonal offices as security is still not complete.
Although the Ludhiana Municipal Corporation has got successful in getting the loan of Rs 100 crore passed from Canara Bank,the long-pending developmental projects waiting for the infusion of funds still have to wait a little more as the funds will be transferred to the civic agency in small instalments as the documentation of keeping its two zonal offices as security is still incomplete.
Sources from MC said the loan had been sanctioned but the paperwork and other formalities to keep Zone B and Zone D office as security for the loan was still pending and thus the amount would not be instantly credited to the MC but in small instalments.
In the documents accessed by Ludhiana Newsline,the MC says,MC is more or less self-sufficient to manage its day-to-day expenses but when it comes to development works,which require huge investment,MC faces extreme shortage of funds.
The proposal and need for this Rs 100 crore loan was felt by the Finance and Contract Committee (F&CC) at a meeting held on November 1,2012. Thereafter,the MC approached 11 banks for getting the loan.
The banks approached were State Bank of Patiala,State Bank of India,UCO Bank,ICICI Bank,HDFC Bank,Canara Bank,Dena Bank,Axis Bank,Indian Overseas Bank,Bank of Baroda and Punjab National Bank.
At a meeting held by the MC for bank officials to discuss the interest quotations on November 8,2011,seven banks Bank of India,Axis Bank,HDFC Bank,UCO Bank,State Bank of Patiala,ICICI Bank and State Bank of India responded and attended the meeting.
While the MC was considering the quotations of Bank of India which offered loan at proposed 12.50% without government guarantee and 11.50% with government guarantee,the deal was finally struck with Canara Bank which later through its letter dated February 5,2013 offered loan at 10.25% interest on base rate.
With sanction of this loan,the MC can also hope to pay the pending dues of contractors who have in some areas even refused to work in absence of payments.
Davinder Singh,additional commissioner,confirmed the sanction of loan and said,We are waiting for the payment and soon the funds will be used on priority basis.
The MC has to repay the loan in three years and Zonal offices of Zone B ( near Shingar Cine ma) and Zone D (Sarabha Nagar) have been kept as security with the bank.