Textile bodies welcome RBI measures

Indian Texpreneurs Federation

(ITF) on Friday thanked the RBI for extending loan moratorium to six months which would help textile industries manage cash flow towards re-starting businesses during the post-COVID-19 times.

Conversion of deferred interest as a one-year term loan would also help the companies manage the liquidity and speed up the revival process because every rupee is important now to streamline post-COVID business operations, ITF convenor Prabhu Dhamodaran said in a statement here.

Stating that the industry expected the same level of repo rate reduction, he said, "With the announcement by the RBI, our entire energy should be on talking with banks to get the practical benefit of all rate cuts."

Prabhu thanked the Finance Ministry and RBI for the timely intervention, even as the RBI governor had mentioned about its vigilance and battle-readiness, which was giving confidence to industry players.

 

Meanwhile, Tirupur Exporters Association (TEA) also thanked RBI for reduction of the policy repo rate by 40 basis points (0.4 per cent) from 4.40 per cent to 4 per cent with immediate effect.

He said this was the second reduction RBI has done after reducing from 5.15 per cent to 4.40 per cent on March 27 during the COVID-19 environment.

Thanking RBI for the measures to improve the functioning of markets, TEA president Raja M Shanmugham hailed the decision to increase the maximum permissible period of pre- shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months for disbursements made upto July 31.

He said this measure is beneficial to Tirupur knitwear garmenting units, as they have resumed operations and functioning partially from the second week of May.

On the import front too, the RBI has decided to extend the time for completion of outward remittances against normal imports into India from six months to 12 months from the date of shipment for such imports made on or before July 31, which would be helpful for the speciality fabric and machine importers, he said.