Kerala's Transport Development Finance Corporation in huge financial crisis

Thiruvanathapuram: Kerala Transport Development Finance Corporation Limited (KTDFC), a public sector financial institution, is on the verge of closure due to its financial crisis. The institution's financial troubles have reached a point where it risks losing its licence to operate as a financial entity. 

The public sector organization is struggling to pay back the money despite investors approaching it in droves. The government does not intervene even though the salaries of the employees are regularly stopped. Those who had invested crores of fixed deposits believing that it was a government-run institution were trapped. KTDFC cannot refund any money to anyone even after the deposit period is over. 

The root cause of KTDFC's financial woes lies in the default on loans provided to Kerala State Road Transport Corporation (KSRTC). These loans were acquired by KTDFC from cooperative banks. KSRTC's outstanding debt to KTDFC, which includes penalty interest, amounts to more than 700 crores. This default has also had a ripple effect on Kerala Bank, which had provided loans amounting to Rs 350 crores to KTDFC as per government directives.

The public's investment in KTDFC stands at approximately Rs 580 crore. The Reserve Bank of India (RBI) has issued a notification warning that failure to repay this amount may result in the revocation of KTDFC's licence to operate as a non-banking financial institution.

Despite earlier efforts, including a meeting chaired by the Chief Minister, no solution was taken to address this crisis. Transport Minister Antony Raju is also involved in seeking a solution to this pressing issue. However, as it stands, the financial future of KTDFC remains uncertain, with far-reaching consequences for investors and the institution itself.