Kozhikode Corporation is likely to repay the debts of its Kudumbashree units

The Kozhikode Corporation reached an agreement with Indian Overseas Bank (IOB) to waive interest on loans given to some of Kudumbashree’s subordinate units that worked on the waste management front. The civic body plans to pay off unit debts.

The loans of ₹2.5 lakh each, some from IOB and some from the State Bank of India, were used by 51 solid waste management units of the Company to purchase autorickshaw goods to transport the collected waste in different parts of the city at collection points in 2004-2005. However, most units were unable to repay their loans, which, added to interest, currently amount to over ₹3 crore. The loans were taken on behalf of unit chiefs and deputy chiefs, who now face threats of seizure from banks.

The issue has been brought up for discussion in the company’s board on several occasions over the past few years and the board recently decided to help Kudumbashree units. “We have come to an agreement with IOB to waive interest and let the units pay only the principal amount to sort out the problem. So, the 27 units that owe ₹2.63 crore will have to pay only ₹23 lakh now. In fact, they don’t have to pay it, since the Society will pay it for them,” said P. Diwakaran, Chairman of the Society’s Standing Welfare Committee.

Kozhikode Corporation was the first in the state to deploy Kudumbashree members as solid waste management workers 20 years ago. “Because this was just the beginning and the state was only beginning to take the issue of waste management seriously, the units couldn’t get a lot of revenue out of it, like they do now. So they didn’t have enough savings to pay off their debts,” Diwakaran said.

The company’s deal with IOB comes as a respite for 27 groups, while another 24 groups who had taken a loan from State Bank of India have yet to get relief. “We will discuss with the SBI authorities to give similar allowances to these 24 groups as well,” Diwakaran said, adding that a few of the groups have somehow repaid their debt.

However, the plan still needs to be approved by the state government. “The state should allow us to use our funds to deal with the problem,” Diwakaran added.

Luisa D. Fuller