THIRUVANANTHAPURAM: The Kerala State Cooperative Banks attempt to make use of its surplus funds for granting major loans, and thereby reduce its operating loss, is understood to have suffered a setback with the National Bank for Agriculture and Rural Development (NABARD) turning down a proposal of the National Agricultural Cooperative Marketing Federation (NAFED) for a working capital loan of Rs.500 crore.
NABARDs clearance is imperative for the KSCB to sanction loans. The proposal has been rejected in spite of the Central government giving a letter of assurance for sanctioning the Rs.500-crore loan. The national federation, which works for providing remunerative prices to farmers for their produce, is involved in the procurement of copra and paddy, among other produce. The proposal forwarded by the bank for NABARDs clearance on April 7 was returned after a month with a note that the proposal was �carefully examined but could not be acceded to in the present circumstances. The negative network of the KSCB was cited as a reason for rejecting the proposal