Tuesday was a historic day as Nafed settled all its dues with the lender banks and became again a proud cooperative it used to be once upon a time in the past. It has come back to farmers, said one of its Directors with a sigh of relief.
The story of revival package hogging media headlines for months without making any progress has become stuff of the past. The whole exercise was possible due to central govt support as the Nafed Chairman V R Patel profusely thanked the Prime Minister for his unstinting support.
Nafed signed the Debt Settlement Agreement with its eight lender banks at its headquarters in New Delhi. The One Time Settlement with the lender banks has been made at Rs. 478 Crore with cash payment of Rs. 220 Crore and assignment of sale rights of one of its prime properties located at Lawrence Road, New Delhi.
In addition, the lenders are entitled to the assignment of auction right of the property of one of the defaulters of its tie-up business conducted in the years 2003-05. The Deputy General Manager, Central Bank of India, signed the agreement on behalf of lender banks with Addl. Managing Director AMD, NAFED.
It may be recalled that the Federation had mired itself with a number of controversial businesses conducted with private parties, when the borrowings made from banks were diverted to the private associates without proper collateral/securities. This has led to the default by Nafed to its bankers as the monies were not returned by the business associates. Such defaults had reached a level, when Nafed had no money to pay in the years 2011-12, forcing banks to declare Nafed’s account as NPA.
The organization serves the farmers throughout the country by implementing the Price Support Scheme of Govt. of India for Oilseeds, Pulses, Copra & Cotton. During the last three years, the Federation has made record procurement of Oilseeds & Pulses at MSP under PSS. Further it has been the major agency having procured around 90% of the buffer target of Pulses.
The Govt had constituted a Committee headed by Additional Secretary & Financial Advisor, Department of Agriculture, Cooperation & Farmers’ Welfare comprising of senior officials from the Departments of Expenditure, Financial Services, Cooperation and Managing Director, NAFED, to work out the scheme for the financial revival including the One Time Settlement with the banks. The Committee had held various meetings with the lender banks and decided the OTS in January, 2016.
Initially, the Govt was to provide the financial assistance through the interest free loan against Nafed’s properties, but later on it was revised with the contribution by Nafed through cash payment and transfer of one of its prime properties. Govt. of India has undertaken to provide for the shortfall in the OTS amount, if any.
This settlement has brought much relief to the Organization and its employees in particular and Cooperative Sector in general.
The Chairman and the senior Directors of Nafed were present at the signing of the Debt Settlement Agreement. The Chairman, Nafed, thanked Prime Minister of India, Union Agriculture & Farmers Welfare Minister, Union Finance Minister, and Minister of State for Agriculture & Farmers Welfare for the unstinted support and trust in Nafed. He especially thanked the Principal Secretaries to the Prime Minister for their initiatives in implementing the revival package of Nafed.
The Managing Director Sanjeev Chaddha who has been laboring hard all these years for its revival, thanked the Govt of India for its support in implementing the One Time Settlement with the lender banks.
V R Patel, Chandra Pal Singh Yadav, Vijender Singh and Sunil Kumar Singh along with MD Sanjiv Chaddha, among others were present in the final meeting with the lenders lenders.