TUFS: 400 interest subsidy applications put on the back-burner

'Centre yet to release the amount to banks'

Nearly 400 applications seeking interest subsidy under the Technology Upgradation Fund Scheme (TUFS) available for the textile industry have been put on the back-burner as the Union government has not released the subsidy amount to the banks.

Under the TUFS, the interest subsidy of five per cent payable to the borrower has not been received by the banks. This has led to the pending of 400 applications, according to V K Gupta, deputy managing director, State Bank of India (SBI).

Addressing a press conference in Tirupur, he said that the bank had started release of funds under TUFS in October 2005. Of the total Rs 535 crore allocated for TUFS this year, the bank has so far has processed 300 applications seeking money to the tune of Rs 54 crore.

"But during the past two months, nearly 400 applications have been pending due to lack of funding from the Union ministry of textiles. We expect nearly Rs 75 crore to be sanctioned by the ministry in a week's time thus speeding up the process of releasing the amount to the textile industry," he added.

Commenting on the growth of the bank's business in Tirupur, Gupta said so far it had advanced Rs 1,750 crore to the garment industry and an additional amount of Rs 600 crore to be sanctioned was in the pipeline.

Of the total Rs 8,000 crore knitwear exports from Tirupur, SBI has advanced Rs 1,800 crore as export finance, he added.

SBI is also planning to implement the core banking solutions (CBS) in all its branches across the country by the end of the current calendar year. Of the total 133 branches in the Coimbatore region, only 33 have CBS facility. The bank is likely to implement the facility in the remaining branches by the end of June this year.