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Thursday, September 16, 2021

Maharashtra State Cooperative Bank to lease out 12 sugar mills

The current batch of 12 mills on lease include those in Aurangabad, Wardha, Buldhana, Beed, Dhule, Latur, Solapur and Yavatmal. The total outstanding amount of these mills is Rs 1,480.34 crore.

Written by Parthasarathi Biswas | Pune |
Updated: August 12, 2021 10:38:44 am
Maharashtra State Cooperative Bank to lease out 12 sugar millsMSC Bank, the apex cooperative bank in the state, finances cooperative sugar mills with short term as well as long-term loans. (Representational)

The Maharashtra State Cooperative (MSC) Bank has decided to lease out 12 sugar mills, including the Yashwant Cooperative Sugar Mill in Theur near Pune, for the upcoming sugar season of 2021-22. These mills were earlier impounded by the bank due to their failure to repay loans.

The current batch of 12 mills on lease include those in Aurangabad, Wardha, Buldhana, Beed, Dhule, Latur, Solapur and Yavatmal. The total outstanding amount of these mills is Rs 1,480.34 crore.

The Yashwant Cooperative Mill, which has been closed since 2010, has been in the eye of the storm with the farmers’ outfit Swabhimani Shetkari Sanghatana alleging political interference as the reason behind the mill lying idle. Located close to Pune, the cooperative mill has substantial land assets, which are considered as prime real estate.

MSC Bank, the apex cooperative bank in the state, finances cooperative sugar mills with short term as well as long-term loans. Sugar mills pledge their stock and raise working finance from the bank before the season. The bank then recovers the loan with interest from the amount received by the mill from selling their sugar stock.

However, when cooperative mills default in payments, the bank and other financial institutions take over the mills and sell them off. As many as 48 cooperative mills have been sold by MSC Bank to private players to recover pending loan amounts.

Jijamata Cooperative Sugar Mill in Sindhkhedraja taluka of Buldhana and Vinayak Cooperative Sugar mill in Vaijapur taluka of Aurangabad have been idle the longest, with the last crushing season taking place in 2000.

Sangola Taluka Cooperative Sugar mill in Sangola taluka of Solapur district, which had a crushing season in 2012, has been shut for the least amount of time.

Speaking to The Indian Express, Vidyadhar Anaskar, chairman of MSC Bank, said the bank had leased out six sugar mills last season. “They ran their operations well and have been regular in repayment of their loans and rent. These mills also gave a boost to the rural economy,” he said.

However, sale of defunct cooperative sugar mills by the MSC and other cooperative banks has been a major issue in the state, with the opposition BJP often accusing the NCP and Congress of corruption in such deals. The Bombay High Court had earlier pulled up the then board of directors of MSC Bank for its alleged role in selling the mills much below their value.

The Enforcement Directorate has recently taken over the Jarandeshwar Sugar Mill in Satara district, with Deputy Chief Minister Ajit Pawar being mentioned in the FIR. Pawar has denied all wrongdoing in the matter.

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