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13 Jul 2024, Edition - 3287, Saturday

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Textile industry welcomes RBI’s announcement

Covai Post Network


Coimbatore : Indian Texpreneurs Federatiaon (ITF), a textile industry body, Thursday welcomed and appreciated RBI for its announcement providing a framework for restructuring of MSME Debt in its monetary policy.

“We estimated around 30-40 per cent of companies in our sector (based on the coverage of survey of 1,800 companies whose liquidity position is precarious), would benefit immensely through the implementation of restructuring scheme and this could kick start a revival for the textile industry itself,” ITF Convener, Prabhu Dhamodharan said in a statement.

“Our only request would be to include this scheme for MSME’s as per the revised definition notified by RBI vide circular dated 02-July-2020 which would enable a comprehensive coverage of companies and this change is much needed for the spinning sector to get eligibility for the scheme,” he said.

There is immense opportunity for Indian textile companies post COVID-19 due to the favorable transition as preferred export destination coupled with strong manufacturing capabilities and improvement in liquidity was the only catalyst that is required for the textile companies to utilize this unique opportunity, which will also materialize with this today’s restructuring scheme announcement, Prabhu said.

Meanwhile, Lakshmi Vilas Bank, Treasury Head, R K Gurumurthy in a separate statement said that RBIs rate setting committee left rates unchanged and even the stance of easy monetary conditions remains unchanged.

While this was expected, market may feel initially disappointed as the policy leaves the steepness of the rate curve unaddressed, coming as it does at a time when growth is totally absent, he said..

RBI’s caution on rates is driven by the fact that retail inflation is rearing its ugly head with food inflation remaining sticky and higher and RBI therefore expects elevated inflation readings for a few more months, although core inflation is soft.

The positive thing is that RBI would continue to be watchful and has not yet cried halt to the easing cycle, Gurumurthy said.

“Whilee there was nothing on key policy rates to write home about, a few developmental measures with regulatory tweaks will go a long way in providing stability to key sectors of the economy. Will have to wait and see detailed circular guidelines for the finer aspects of these measures as one of the measures that relates to capital charge on debt schemes of mutual funds could be a game changer,” he said.

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