Kerala government allows ULCCS to accept FDs at high interest rates | Kochi News
The nod comes at a time when the government has significantly reduced interest rates on FDs and term deposits in the treasury as well as in the state cooperative bank.
THIRUVANANTHAPURAM: The Uralsungal Contractual Labor Cooperative Society (ULCCS) which prospered by bagging several government projects, especially during the LDF rule, was authorized by the government to accept term deposits from the public at a higher rate as the rates applicable to deposits in Public Treasury as well as the Cooperative Bank of Kerala.
Interestingly, the cooperative society was allowed to make its deposit system attractive to the public at a time when the government drastically reduced interest rates on term deposits and term deposits in the Treasury as well as ‘at the Kerala State Cooperative Bank. The government had reduced interest rates on term deposits in cooperative societies by 0.5% overall for various deposit periods, compared to rates last year.
In accordance with the circular issued by the register of cooperative societies on January 22, 2021, the current rates are 4.75% (against 5.25%) for deposits between 15 and 45 days, 5.25% (against 5.75 % previous year) for deposits between 46 and 90 days, 5.75% (from 6.25%) for deposits between 91 and 180 days, 6.75% (from 7.25%) for deposits between 181 and 365 days, 6.75% (from 7.25%) for deposits between one to two years and 6.50% (from 7%) for two years and more.
In addition, interest rates on Treasury deposits were reduced from 1.10% to 2.10%. In accordance with the order of the finance department of January 18, the interest rates on short-term cash deposits were reduced and set at 5.40% (against 6.50% the previous year) for deposits between 46 and 90 days, 5.90% (from 7.25%) for deposits between 91 and 180 days, 5.90% (from 8%) for deposits between 181 and 365 days and 6 , 40% (from 8.50%) for deposits between one and two years.
However, in the latest decree issued by the Department of Cooperatives on June 22, the government authorized ULCCS to continue accepting term deposits at a 1% higher rate until March 31, 2022, in order to meet working capital to carry out the various projects he has taken over. In its request to the joint registrar of cooperatives, the ULCCS had asked that it needs to find more funds because it has to carry out various projects worth Rs 4,100 crore.
She argued that being a working cooperative society, the ULCCS finds it difficult to raise funds and it is under these circumstances that the cooperative seeks permission to accept funds at a higher interest rate. The government had also given a similar authorization to the ULCCS to accept deposits at a higher rate in 2020-2021, which helped the organization to raise an additional crore of Rs 342.28. As of March 31 of this year, ULCCS has a fixed deposit balance of Rs 1,370.85 crore, as per government decree.
As an “accredited agency for government-run construction projects”, ULCCS has won contracts for several government projects without going through a competitive open tendering process.