Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has stated that the extension of moratorium period of term loan for another three months i.e., 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 Finance Minister 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. SIMA Chairman stated that the extension of the permissible period of pre & 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.
SIMA Chief has stated that the Indian textiles and clothing industry had been facing long drawn recession and demanding two year moratorium period for repayment of all term loans well before the COVID impact needs at least another seven months moratorium period i.e., upto March 31, 2021 to avoid large number of textile units from becoming sick and NPAs. He has stated that the international and domestic demand for textiles and clothing is likely to drop by 30 per cent with the existing lockdown condition during the current financial year. Ashwin pleaded with the government to allow one time debt restructuring for the textiles and clothing industry that would greatly help the mother industry that employ over 105 million people to prevent job losses and sustain the survival and revive from the unprecedented crisis.
SIMA Chairman has pointed out that though RBI has been making announcements, several banks are yet to extend the various benefits relating to interest rate reduction and additional working capital already announced by RBI on 27.3.2020. He has pleaded the Hon’ble Prime Minister to intervene in the matter, direct all the banks to extend the various benefits announced by RBI immediately so that the industry could tide over the COVID crisis.