Mayor Subrata Mukherjee plans to seek loans to the tune of Rs 500 crore from nationalised banks, against a collateral security of the Calcutta Municipal Corporation’s (CMC) Rs 7,000-crore fixed assets.
The move is being seen as a step towards gaining financial freedom in taking up development schemes for the city.
“If the loans come through, the CMC will enjoy a free hand in drafting its own development schemes, without having to wait for the state government’s special grants,” said Mukherjee on Friday. “My objective is to replace expensive overdraft facilities with a cheaper option of the term-loan benefit,” he added.
The mayor and municipal commissioner Debasis Som have already held discussions with four nationalised banks. “We have also held talks with the Bank of India, which has reacted positively to our proposal,” the mayor said.
Other banks that are being tapped for loans are Union Bank of India, Punjab National Bank and Indian Overseas Bank. “The civic authorities need not take permission from the municipal affairs department for taking loans against their fixed assets,” said a senior law officer.
Till now, the CMC would take loans from nationalised banks against a Rs 250-crore fixed deposit. The CMC had already incurred a loss of Rs 50 crore in the past several years through this scheme.
The main disadvantage of taking loans against fixed deposits is that the entire amount remains blocked for years, until the loan is repaid along with interest, Mukherjee said. “Besides, in term-loans, a moratorium is issued by the bank to the debtors. In case of loan against fixed deposits, no such moratorium could be enjoyed,” he added.
The CMC had already raised Rs 100 crore by issuing bonds and collected Rs 120 crore under the property tax waiver-of-interest scheme. “The fund will be utilised for the development of a filtered water supply system through water treatment plants, booster pumping stations and new pipelines,” Mukherjee said.