The Hindu Business Line : Tea industry to urge RBI to make Madhukar proposals binding

THE tea industry will urge the Reserve Bank of India to make the Madhukar committee recommendations on funding of the tea industry mandatory for all banks. It will make its point at a meeting with top bankers, scheduled to come together on January 12 under the Indian Banks' Association (IBA) umbrella.

The meeting will discuss, inter alia, the possible effect of the recommendations on borrowers - in this case, the tea companies. These recommendations broadly relate to the provision of reasonable rates of interest and conversion into term loans.

According to Mr Madhukar, who headed of the panel, IBA will discuss the recommendations in consultation with the tea sector. "The idea is to ensure that there is increased scope of their application, given the circumstances that are currently faced by the industry," he observed.

Mr C K Dhanuka, Chairman of Indian Tea Association (ITA), said his organisation along with Tea Board will make a special representation before the banking community. "We will request RBI to ensure that all banks compulsorily follow the proposals put forward by the committee," he said.

According to him, local bankers such as United Bank of India and UCO Bank have been "very supportive" of the industry's needs. "However, I have received reports that some of the leading bankers have taken a very hard stand insofar as lending to tea industry is concerned," Mr Dhanuka told Business Line.

The industry is said to require additional funds to the tune of Rs 350 crore for development work in the gardens and address its cash flow issues. "With the prospects of the industry brightening, the banks have to be more proactive in their lending operations," Mr Dhanuka pointed out.

Mr Madhukar, CMD of UBI, stated that the bank, like some of its contemporaries, is looking into the possibility of supporting the tea sector in a more comprehensive manner. "We have been at it for some time now and discussions with industry representatives have been going on. Some concrete steps may be taken shortly," he observed.

More Stories on : Tea | RBI & Other Central Banks | Farm credit

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Monsoon plays truant again in Kerala

UK company signs MoU with Bengal firm for flower exports

TN onion growers' plea for trading centre

Plea to scrap subsidy on natural rubber exports

Uncertainty continues in rubber market

Tea industry to urge RBI to make Madhukar proposals binding

`Quality, consistency key to improving tea exports'

Hutti Gold Mines makes record monthly output

Boost for contract farming in cotton

AP tobacco auctions from Jan 23

Uptrend in pepper futures on speculative buying

Kishor Shamji elected IPSTA chief