Thiruvananthapuram: Government contractors’ association has alleged that the newly-formed Kerala Bank is denying loans to government contractors, and it has pushed the contractors into crisis.
According to the association, the bank has taken an unofficial decision that government contractors need not be considered seriously for sanctioning loans, as they delay repayments. Because of this decision, hundreds of small-time government contractors have landed up in crisis, the association said. The association stated that it is natural that there would be natural delay in completion of government’s constructions, thereafter completing the paper-works, producing the bill and getting the payments released. But for undertaking the government’s works, the support of government’s institutions is also required.
It said that once the payment is received, the loans are repaid. Denying loans in the name of delayed payments are unjustifiable, the association said. The association said that the main reason for the crisis is that government contractors are treated like other traders, and cannot repay loans on a daily or a monthly basis. The constructions in the country are a continuous process and if it has to continue seamlessly, the banks have to provide loans. If loans are denied to the contractors, it would adversely affect the constructions in the public sector, the association said.
It further said that this unofficial ban on loans is a major hit to construction in public sector that is reeling under Covid-19 and the lockdown following it. With the demand to make the Kerala Bank more contractor-friendly, the association has decided to approach the chief minister and the cooperation minister.