Sakthikantha Das, Governor, Reserve Bank of India (RBI) has announced a slew of financial relief measures as the extension of COVID-19 package to tide over the unprecedented crisis faced by the industry.
Coimbatore: Sakthikantha Das, Governor, Reserve Bank of India (RBI) has announced a slew of financial relief measures as the extension of COVID-19 package to tide over the unprecedented crisis faced by the industry.
In a press release issued today, Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has stated that the extension of moratorium period of term loan for another three months upto August 31, 2020 has come as a sigh of relief for the ailing textiles and clothing industry. He stated that the MSME package announced by the Minister of Finance on May 13, 2020 under 'Aatma Nirbhar Bharat Abhiyan' would benefit MSME segments and today’s RBI announcements would benefit the non-MSME industrial units to mitigate the financial crisis.
The deferment of interest on working capital, reduction of margin money for working capital and the relaxation of prudential financial norms are the welcoming features of the announcement made by RBI Governor today, he stated. The SIMA Chairman also said that the extension of the permissible period of pre and post-shipment export credits by three months and the time for remittances against normal imports from six months to 12 months would also greatly help the exporters and importers to ease their liquidity.
The SIMA Chief went on to say that the Indian textiles & clothing industry that had been facing long drawn recession and demanding a two year moratorium period for repayment of all term loans well before the COVID impact need at least another seven-month moratorium period upto March 31, 2021 to avoid a large number of textile units from becoming sick and NPAs.
He had stated that the international and domestic demand for textiles & clothing is likely to drop by 30% to 40% with the existing lockdown condition during the current financial year. SIMA Chairman Ashwin pleaded to the Government to allow one-time debt restructuring for the textiles and clothing industry that would greatly help the mother industry that employs over 105 million people to prevent job losses and sustain the survival and revive from the unprecedented crisis.
He pointed out that though RBI has been making announcements, several banks are yet to extend the various benefits related to interest rate reduction and additional working capital already announced by the RBI on March 27, 2020. He requested the Prime Minister to intervene in the matter and direct direct the banks to extend the various benefits announced by RBI immediately so that the industry could tide over the COVID crisis.