Industries in Coimbatore region, especially those in the textile sector, have welcomed the announcements by Reserve Bank of India Governor Shaktikanta Das saying it will give relief to the industries as they need more funds now. According to Confederation of Indian Textile Industry chairman T. Rajkumar, the textile and clothing industry had sought extension of moratorium period for another 10 months when the RBI initially announced moratorium for three months.
The measures announced on Friday will prevent a number of textile and clothing accounts from becoming NPAs. But the banks should pass on the benefits of repo rates reduction to the customers in full, he said. A. Sakthivel, chairman of Apparel Export Promotion Council, said increasing the maximum permissible period of pre and pro-shipment export credit from the existing one year to 15 months for disbursements made till July 31, 2020 would help the exporters.
The penalties levied by the banks should be converted into working capital term loan with minimum interest, he said.
Southern India Mills’ Association chairman Ashwin Chandran said the industry needed another seven months moratorium. It would also find it difficult to repay the accrued interests of moratorium period within six months as the interest component would double.
The government should permit conversion of accrued interest into term loan and repayment of it in two years with six months moratorium, he added. Raja M. Shanmugham, president of Tiruppur Exporters Association, said the decision to extend time for completion of outward remittances against normal imports into India from six months to 12 months from the date of shipment for imports made before July 31 would help the specialty fabric and machinery importers.
According to Indian Texpreneurs Federation convenor Prabhu Dhamodharan, the industries will now talk to banks to get the real benefit of the rate cuts announced by the RBI.
President of the Indian Chamber of Commerce and Industry, Coimbatore, V. Lakshminarayanasamy said the RBI should take a calibrated approach to save the economy and its announcements would bring relief to corporate borrowers. The borrowing costs were expected to come down for trade and industry. The banking system now had substantial liquidity and the banks should support the industries, he said.
