The Hindu Business Line : NCD transfer in textile accounts — Panel not for interest subsidy to investors

The committee has made it clear that the nodal agencies must ensure that the NCDs transferred to other investors in the market should not be given the benefit of the 5 per cent concessional interest reimbursement granted under the TUFS.

Coimbatore , Jan.1

THE technical advisory-cum-monitoring committee of the technology upgradation fund scheme (TUFS) for the textile industry has decided to permit transfer of non-convertible debentures subscribed either by a nodal agency (NA) covered under the TUFS projects or by the primary lending institution (PLI) co-opted by the NA to another agency or its co-opted PLIs.

Such transfer of the non-convertible debentures (NCDs) would, however, be permitted only once in its lifetime. The committee has at the same time made it clear that the nodal agencies must ensure that the NCDs transferred to other investors in the market should not be given the benefit of the 5 per cent concessional interest reimbursement granted under the TUFS.

The committee's decision was taken at its latest review meeting on the TUFS when it went into the issue of allowing eligibility of claiming interest reimbursement in the event of the transfer of the NCDs held by one NA/its co-opted PLIs to another NA or the local lending institution co-opted by it, a communication from the office of the Textile Commissioner has said.

According to the Textile Commissioner's office communication, the committee also examined at the meeting the eligible investment ceiling permitted under the credit linked capital subsidy (CLCS) scheme under operation as part of the TUFS that gives 12 per cent interest subsidy for the SSI textile accounts.

The monitoring committee had clarified that under CLCS, units were permitted to make new investments eligible under the TUFS up to Rs 1 crore or till the units reached the SSI limit whichever is higher. The subsidy amount under the scheme could be worked out accordingly.

The committee in its latest meeting has decided to allow the fitting of electronic Jacquard/Dobby on stand alone basis (with a 10-year vintage) that are eligible under TUFS into any looms irrespective of whether loom is TUFS compatible or not.

Meanwhile, Industrial Development Bank of India, the nodal agency for non-SSI textile sector under TUFS has communicated that it has co-opted the Bank of America and the Saraswat Co-operative Bank Ltd for handling the non-SSI textile sector under TUFS.

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