The corpus fund for yarn banks in Surat has been increased to Rs 2 crore and bank guarantee reduced from 50 per cent to 25 per cent. This means power loom weavers will be able to procure yarn at concessional rates. Yarn is the raw material for the polyester fabric.
Surat has two such yarn banks. Surat is India’s largest manmade fabric center and has around 5.5 lakh power loom machines which produce three crore meters of fabrics a day and employ around seven lakh workers.
The yarn banks provide an opportunity to weavers to arrest price fluctuations and check the presence of middlemen. The yarn banks allow weavers to procure yarn on credit and repay the amount in installments. The yarn banks get yarn samples from around the world and store them. Domestic industry can get access to yarn samples of global standards and do further research and come out with innovative products.
These banks were started with an initial corpus fund of Rs 1 crore for purchasing yarn from the open market and selling at concessional rates. Since the corpus fund at the yarn banks has been increased from Rs1 crore to Rs 2 crores, they will be able to cater to 200 weavers, while earlier it was only around a 100 weavers.