Home / Knowledge / News / Textiles / Restructure Indian textile sector loans, says Committee
Restructure Indian textile sector loans, says Committee
26
Mar '12
Smt. Panabaaka Lakshmi, Minister of State for Textiles has informed that The Confederation of Indian textiles Industry (CITI) has reported that out of 287 companies listed in the Bombay stock exchange 122 companies have reported net losses in Q1 of 2011-12 and 166 companies have shown poorer results compared to previous year. Many companies are reported to be finding it extraordinarily difficult to repay term loans and finance working capital and have reported that they may default on loan repayment.

The highest price volatility in cotton prices in the past 150 years followed by a collapse in April, 2011, had immediate repercussions in the domestic market. Cotton yarn production is down by15 per cent and fabric production is down by 19 per cent in the April-October, 2011 period over the previous year. Textile Mills faced with high priced cotton inventories could not pass through the prices into yarn and fabrics as the price decline came suddenly in the month of April, 2011. This led to a slowdown in production and reduced utilization capacity.

The Ministry of Finance constituted a Committee under the Chairmanship of Shri M.D. Mallya, Chairman Bank of Baroda for examining the textile restructuring proposals. The Committee identified a sizable exposure to the textiles sector of Rs. 146885 crores.

The Report of the Committee recommended a restructuring package that sought relaxation in prudential norms by RBI for banks to restructure working capital and term loans. Government has not sought international collaboration for investments; foreign investments are on automaticroute for textile sector.

The proposal was submitted to and examined by Reserve Bank of India (RBI).

RBI advised that banks are free to restructure any account, whether standard, sub-standard or doubtful as also more than once, provided the financial viability is established and there is a reasonable certainty of repayment as per the terms of the restructuring package but clarified that it was in favour of relaxing its prudential guidelines on restructuring of advances, provisioning norms, risk weights etc. for any specific sector or industry.

RBI has recommended to the Government to undertake a stress study of the textile sector.

Ministry of Textiles - India

Must ReadView All

L-R Manish Singhai, COO, Peter England; Vinai Kumar Saxena, chairman, KVIC; Ashish Dikshit, business head, ABFRL and Anshu Sinha, CEO, KVIC while signing agreement. Courtesy: ABFRL

Textiles | On 24th May 2017

Aditya Birla & KVIC enter into a strategic partnership

Aditya Birla Fashion and Retail Ltd (ABFRL) and Khadi and Village...

Courtesy: Jabong

Apparel/Garments | On 24th May 2017

Jabong Mood Store redefines online shopping in India

Jabong, India's leading online fashion retailer, has launched the...

Apparel/Garments | On 24th May 2017

G-III Apparel enters into license agreement with PVH

G-III Apparel Group has entered into a multi-year license agreement...

Interviews View All

Dharmendra Shah
Ozone PB Spintex Limited

‘We have made huge investments to ensure quality yarn production.’

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Rahuul Jashnani
Jashn

‘Online economy has changed the whole dynamics of buying habits.’

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search