In a major boost to the cooperative marketing sector, the Andhra Pradesh Government has approved a Government Guarantee of Rs 300 crore for the Andhra Pradesh State Cooperative Marketing Federation Ltd. (AP MARKFED) to enable it to secure working capital finance from the Central Bank of India during the financial year 2026-27.
According to G.O. issued by the Agriculture & Cooperation Department on Monday, the guarantee will cover both the principal and interest for the entire tenure of the term loan. However, the Government clarified that AP MARKFED will be solely responsible for servicing the loan from its own resources.
The guarantee will become enforceable only if AP MARKFED defaults on its repayment obligations.
The Federation has also been directed to submit the repayment schedule, including details of the interest rate, tenure and moratorium period, while paying a 5% guarantee commission on the guaranteed amount.
The decision follows a proposal submitted by AP MARKFED after receiving an offer from the Central Bank of India for Rs 300 crore in working capital assistance.
