State to lose Rs 200 crore from OTS Scheme for KSFC

Bangalore, July 18 (UNI) The State Government stands to lose Rs 200 crore following the introduction of the waiver of interest on 'One Time Settlement' (OTS) scheme extended to the defaulters of Karnataka State Finance Corporation (KSFC).

The state had decided to waive off the interest for loans between Rs 10 and 25 lakh for entrepreneurs who had availed loan from struggling KSFC but failed to repay their loans.

Replying to a query from Mr D M Puttegowda (Congress), during the question hour in the Legislative Council Deputy Chief Minister B S Yediyurappa said the scheme was framed for the year 2006-07 and KSFC, the state-owned finance institution had received overwhelming response for the scheme.

Mr Yediyurappa said the scheme was introduced to help the small and marginal entrepreneurs. A panel was constituted by the KSFC which would scrutinise each case for disbursement under the OTS scheme.

He said the KSFC which was in red for many years had registered a cumulative loss of Rs 600 crore. However, it had made a turn around and posted a profit during the last two years and had started paying dividend to the government. He also assured the Congress member to consider the extension of the scheme beyond Rs 25 lakh.

UNI