Bank officials say sugar mills owe a whopping amount of Rs. 2,900 crore to Maharashtra state cooperative bank with an upward trend in sugar prices caused by the govt. pressure on millers for not paying fair and remunerative prices, reports Financial Express.
Sources say this season, the bank had floated a special 5% margin money loan scheme to help mills recoup the gap in making FRP payments. Under the normal practice, the bank usually gives 85% funds to mills leaving 15% margins to overcome any volatility in the market.
Meanwhile, the sugar commissionerate has stepped up pressure on mills for their failure to make the remaining 20% FRP payments for the season of 2015-16. Revenue and recovery certificate (RRC) orders were issued to four mills, crushing licences of two mills were cancelled, two licences were suspended for the season.
According to the latest arrear report, around 84% of the FRP payments have been recovered while 14% millers still owe payments to farmers. The government has also taken action against 23 factories for not making FRP payments of 2014-15.