Seeking Prime Minister Manmohan Singh’s intervention over textile debt restructuring, DMK Chief M Karunanidhi urged him to direct RBI to issue necessary notification in respect of Rs. 350 billion textile debt restructuring package that the Centre announced on May 29, 2012.
Substantiating the call, the DMK Chief said any further delay in issuance of the notification would result in loans availed by a large number of textile units and small and medium enterprises (SMEs) turning into non-performing assets (NPAs) by June 30.
In his letter to the PM, Mr. Karunanidhi said in spite of the Finance Ministry’s announcement of the package last month, RBI is yet to issue a notification that would enable individual banks to accept applications of textile units seeking restructuring facility.
Mr. Karunanidhi said the notification is important to save textile units from turning into NPAs, as majority of these units have already availed the restructuring facility announced earlier in 2009.
He said the textile industry in Tamil Nadu accounts for around one-third of the country’s textile business, and it serves as a source of livelihood for millions of handloom weavers, garment workers and cotton farmers.
The Government has decided to restructure bank loans of the textile sector in order to relieve the debt-trapped textile industry, which has been ailing due to a sharp fall in cotton yarn prices and poor domestic as well as international demand.
Of the textile sector’s total outstanding debt of Rs. 1558.09 billion, the Government plans to restructure debt of Rs. 350 billion.
Fibre2fashion News Desk - India