Mumbai: On Sunday, the Maharashtra state cabinet made changes to the norms for government assurances on loans to co-operative sugar factories. The cabinet has dropped the stipulation that the factory must give a no-objection certificate from the lender banks to extend the loans. This was done, despite opposition from the finance department, fearing that when receipt is not issued to provide an NOC, the state government would be held responsible for the default of a sugar factory in paying back an earlier loan, reports Hindustan Times.
Also, the cabinet introduced a major change in the accountability of cooperative sugar factory loans. Individual board directors, previously, needed to submit personal bonds for a guarantee before a loan would be disbursed. In addition to the personal responsibility of the directors, the entire board of directors will bear collective responsibility for repaying the loan.
