Maharashtra cabinet nod to close asset reconstruction company as RBI denies licence

An official said that the Reserve Bank of India has denied the license to the state asset reconstruction company. “Due to this, it will be legally impossible for the company to operate. The decision to close the company was taken in the cabinet meeting held today to prevent the continuation of expenses on this company,” the official said.

One of the aims of the company was to support cooperative sugar mills in Maharashtra. It was to also support sick district central co-operative banks as well as dormant industrial assets under Marathwada, Vidarbha, and Konkan development corporations.

According to a proposal from the state’s finance department when it was formed, the company was to work to reconstruct semi-government, government and cooperative assets which were financially sick or non-transparent in functioning. It was then declared that the government would have the responsibility to look after the welfare of members, partners, beneficiaries, and common citizens linked to these assets.

The company had an Additional Chief Secretary (Finance) as its president and Secretary (Finance Reforms) as its managing director.

The directors of the company were to be Joint Secretary (Public Undertakings), Additional Chief Secretary (Cooperation), Principal Secretary (Textile), and Principal Secretary (Industries). Two independent directors were also be appointed to the company.