BANGALORE: The state government has come to the rescue of the cash-strapped Bruhat Bangalore Mahanagara Palike (BBMP) by releasing Rs 250 crore, which the civic body had to pay to many financial organisations. December 31 being the closing day of third quarter of current fiscal, banks had demanded that the Palike to pay interest and principal amount of Rs 750 crore before the year ends. Palike which had presented a budget over Rs 9,000 crore will become a Non Performing Asset (NPA), if it does not pay Rs 750 crore to private and nationalised banks by December 31, 2011, and also, the BBMP’s bank accounts will be freezed. In the recent BBMP council meeting, commissioner M K Shankarlinge Gowda had disclosed this when the councillors had questioned him why the civic body was not taking new projects. Commissioner had reminded the councillors that Palike has a debt of Rs 750 crore. When contacted Gowda, he said that state government has given financial aid of Rs 225 crore, which the Palike repaid to banks on Thursday. “This amount includes both interest as well as principal amount. By repaying the overdue, Palike will now escape the freezing of its bank accounts,” he said. Palike repaid the long standing dues to Corporation Bank, which was one among the major banks to have provided funds to the Palike. Further, the Palike has a debt of more than Rs 500 crore to repay to other banks, including Canara Bank. “We have taken 10 days’ time from other banks and are trying to repay this amount within January first week. We are trying to mobilise funds to clear loans,” he added. According to Deputy Mayor S Harish, state government has given Rs 250 crore to the BBMP, of which Rs 25 crore was paid to Bangalore Metro Rail Corporation Limited (BMRCL). “Palike paid the remaining amount to banks,” he said.
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