SIMA, TEA hail financial relief announced by RBI

SIMA chairman Ashwin Chandran has welcomed the announcement of three months moratorium period for payment of term loans and working capital interest, advising the banks to re-calculate the drawing power liberally and extending additional working capital facility, substantially reducing the repo rate thereby enabling the financial institutions to reduce the rate of interest, and making provisions to exclude the three months moratorium period for asset re-classification and credit rating.

TEA President Raja M Shanmugam thanked the RBI governor for considering the major requisition and providing three months moratorium on payment installments of term loan outstanding and interest on working capital facilities to be deferred by three months. He also lauded the announcement that deferment will not be classified as NPA.

Shanmugam appreciated the decision that in respect of working capital facilities sanctioned in the form of cash credit/overdraft, the banks may recalculate drawing power by reducing margins and/or by reassessing the working capital cycle for the borrowers.

In a press release, Chandran appeal to the Prime Minister to advise RBI and banks to give clear instructions to provide additional working capital to the tune of 25 per cent without any additional collateral or margin money. He also felt that the PM should advise RBI to issue clear direction immediately for extending the moratorium for the payment of interest on term loans as the March 2020 quarter is fast approaching.

He hoped that the Union government would review the situation in the days to come and announce suitable financial measures. He has also appealed to the state governments in South India to defer payment of current consumption charges for three months and waive the demand charges for electricity.

Both Chandran and Shanmugam thanked the Prime Minister, Union finance minister, and Union textiles minister for making certain announcements on financial relief package through RBI.

Shanmugam said he hoped other measures would also be announced soon to support and re-energise the knitwear sector.

Fibre2Fashion News Desk (RKS)