Textile firms’ loans of Rs.35,000 crore to be restructured

August 8th, 2012 - 9:23 pm ICT by IANS  

New Delhi, Aug 8 (IANS) The government has directed public sector banks to restructure loans worth Rs.35,000 crore to textiles firms, which are facing financial problem, Minister of State for Finance Namo Narain Meena said Wednesday.

“Government has advised all public sector banks to set up a separate window for considering restructuring proposals from eligible borrowers in the textile industry on case-to-case basis,” Meena said in written reply to a question in parliament.

The minister said that to help the debt-ridden textiles firms banks can provide a two-year moratorium on term loans and convert working capital into working capital term loans.

The Reserve Bank of India (RBI) has opined that there is no need for any special regulatory dispensation and “banks can provide two-year moratorium on term loans and convert working capital into working capital terms loans with repayment period of 3-5 years as part of restructuring, in terms of existing RBI guidelines,” Meena said.

Meena said the restructuring of debt for the textile sector by banks would not place any financial burden on the government exchequer.

“No timeline has been prescribed for the said restructuring,” he added.

According to the textiles ministry, the total outstanding debt of the sector is Rs.155,809 crore, of which the debt of Rs.35,000 crore needs restructuring.

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