KOCHI: The government has announced that the pension arrears of former KSRTC staff will be paid off on Wednesday. The decision in this regard was taken in the meeting convened by the chief minister on Thursday.

The contract for taking loan from cooperative banks for pension purpose will be signed on Friday. The strike was called off after the pensioners got the assurance from the government that their arrears would be cleared on Wednesday.

The State government had earlier in the day informed the court that the pension arrears of former KSRTC employees would be paid very soon. The government will take over the liability of pension pertaining to the period till July 2018.

Rs 600 crore loan will be taken from Cooperative banks as loan to pay off pension arrears. For this, a decision was taken in the meeting convened by the chief minister on February 7 to form a consortium including cooperative banks.

In the meeting held in the presence of the chief minister on Thursday, it was decided to pay off five months’ pension arrears and this month’s salary. Rs 224 cr arrears will be paid off as the first instalment within a week. Total pension arrears will be paid off this month itself.

For disbursing January salary, Rs 70 crore financial help will be given by the government. For paying off all benefits, Rs 86 crore may be needed. In the budget it was announced that the government would give the guarantee but, in that case the KSRTC would have had to take loan directly.

On Thursday, the government decided to take loan directly, which it will pay back within six months. KSRTC will hand over pensioners’ details to the government and cooperative banks. The loan will be taken at the rate of 10 pc interest.