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More cashew-processing units feel the heat as banks step up action

With the term of the state government's order against bank action ending on August 31, the industry is apprehending banks may start action against more units

Gireesh Babu  |  Chennai 

How Cashews Explain Globalization
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More than 160 accounts of cashew-processing units in Kerala have turned (NPAs) and almost 700 of the 834 registered factories in the state have shut down in the past two to three years, according to industry sources.

With the term of the state government’s order against bank action ending on August 31, the industry, especially small- and medium-scale units, is apprehending banks may start action against more units.

“More than 160 industrialists’ bank accounts have been made and certain banks have taken possession of their homes, factories and other collateral properties. Two entrepreneurs recently committed suicide in Kollam and certain cases of suicide attempts have been reported,” said Rajesh K, convener of the (KCIPC), a joint action council of four organisations: The Federation of Cashew Processors and Exporters, Kerala Cashew Processors, Kollam Cashew Processors and Exporters and Kollam Cashew Guild.

“The chief minister had meetings with the stakeholders and asked the banks not to take action against cashew units till August 31, before which some support from the government was expected to be announced. The moratorium is over, but the chief minister is abroad for treatment and we are waiting for further relief measures,” said Sasidharan Achary, coordinator of the Council.

The industry, based mostly in Kollam district and in the surrounding three districts, has been the source of livelihood of more than three hundred thousand (300,000) women labourers and their dependants, mostly from backward communities in rural areas. Most of the units lack working capital, they said.

Policies of the Central and the state governments, lack of mechanisation, and increasing competition from countries such as Vietnam and China, which buy raw materials from the same as do Indian units, are cited as problems.

First Published: Fri, September 21 2018. 01:43 IST