The Hindu Business Line : Spinners’ association seeks 2-yr moratorium on bank loans repayment

Industry & Economy - Industry Associations
Money & Banking - Credit Market
States - Tamil Nadu
Spinners’ association seeks 2-yr moratorium on bank loans repayment

Urges Centre to reduce term loan interest rates.

‘The Centre should also release, without delay, the interest subsidy under TUF to the mills.’

R. Yegya Narayanan

Coimbatore, Sept. 22 The South India Small Spinners Association (SISSPA), Coimbatore has sought a blanket two-year moratorium on bank loan repayment in view of the tough market conditions the industry has been facing.

It also wanted the Centre to take steps to reduce the hike in interest rates the financial institutions had enforced due to the monetary policies of the Reserve Bank of India.

In a resolution passed at the annual general meeting on September 21, the association said the spinning mills in Tamil Nadu had been facing an unprecedented increase in cotton prices for the past one year because of the policy of the Central Government in permitting export of cotton at the beginning of the cotton season itself, leading to scarcity. It wanted the Centre to follow the example of other countries that maintained a stock to usage ratio of at least 50 per cent.

SISSPA said as there was no sign of any turnaround in the fortunes of the spinning mills, many mills had obtained moratorium on the repayment of their term loans from lending institutions.

However, it wanted the Centre to come to the rescue of the mills by taking steps for a blanket moratorium of two years on loan repayment.

In view of the measures initiated by RBI to rein in inflation, the financial institutions have raised the interest rates up to 4 per cent, which the mills that were facing an unprecedented crisis were finding difficult to meet.

It wanted the Centre’s intervention for a cut in the term loan interest rates.

Power cut issue

In another resolution, the association said the severe power cut imposed in Tamil Nadu had hit the industry hard and wanted the State to ensure uninterrupted power supply to the industries. It also wanted the State not to implement its order fixing minimum daily basic wage and allowance to apprentices. The Centre should also release, without delay, the interest subsidy under TUF (technology upgradation fund) to the mills, it said.

Officers on board

The following were elected office bearers of SISSPA for 2008-10: President - Mr G. Soundararajan; vice-presidents - Mr S.V. Devarajan, Mr K. Thirunavukkarasu and Mr K. Rangarajan; Hon. Secretary - Mr C. Varatharajan; Joint Secretary – Mr J. Selvan; Hon. Treasurer – Mr N. Murugesan.

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