THIRUVANANTHAPURAM: The investors are concerned after the Reserve Bank warned of cancelling the license of the Kerala Transport Development Finance Corporation, which is in dire financial straits. If the government does not take over the debt, it will lose credibility. There will be mass withdrawal of investment. Many other loans guaranteed by the government will also be affected.

Many including retired IAS officers and big companies have invested here. KTDFC is sinking after KSRTC, which borrowed most of the investment and the guarantor government, washed off their hands.

Around 350 investors had approached the ombudsman of the Reserve Bank to get money. The Reserve Bank had issued a stop memo forbidding the operation, realizing a huge gap between investment and assets. This is the first step of revoking the license. The investors concerned have approached the high court.

Four hundred crore rupees is required to repay the overdue deposit alone. Yesterday, when the petition of Laxminath Trade Link Private Limited of Kolkata came up for consideration, KDTFC sought a three-week delay for explanation. Criticizing investors not to treat them as if they are your creditors, the court has granted a two-week reprieve. Lakshmi Nath company has more than thirty lakhs to recover.

Cause of crisis
As per government order, 90 percent of the loan was given to KSRTC without any collateral. KDTFC demanded that the government pay this money, but the finance ministry did not budge. The finance department called a meeting in March to refund the investors. A schedule was also prepared for payment in June, but no further action was taken.

From profit to loss

1. Formed in 1991 with a capital of 50 crores to support KSRTC. The company that provided low-cost car and home loans to government employees turned a profit.

2. More than 2200 crores loan was given to KSRTC and crores were spent on building commercial complexes under BOT system. The crisis started when the loan was not repaid on time.

3. In 2018, the Left government formed a banking consortium led by SBI and shifted the loan liability of KSRTC to it. KTDFC is in trouble after the bank took away a good portion of KSRTC's income.

What govt should do
1) At least 200 crores should be paid to investors

2. Liability of 600 crores of Kerala Bank should be taken over

3. Capital capacity should be increased by 400 crores

4. Avoidance of debt obligations

Economic situation
Assets: 1242 crores
KSRTC loan: 912 crores
Other loans: 80 crores
Construction of commercial complex: 250 crores

Liability
Investment of 1200 people: 555.99 crores
Kerala Bank loan: 600 crores
Government investment: 105 crores