“Banks are not showing willingness to extend pre-shipment credit in foreign currency (PCFC) when it comes to micro, small and medium scale exporters, even though PCFC was regarded as a reliable natural hedging tool to mitigate possible losses due to currency fluctuations.
Grievances
“Likewise, there should be a common template for loan applications so that loan sanctioning could become faster. Presently, different banks were following various formats in the application forms, even though the contents have been almost the same”.
These were some of the major grievances aired by the apparel manufacturers during a face-to-face programme organised between knitwear manufacturers and bank officials by the Tirupur Exporters Association on Thursday.
Officials from as many as 36 commercial banks and credit rating agencies participated in the meeting.
On the PCFC benefits, the Tirupur Exporters Association president Raja Shanmugam pointed out that the tool would come in handy in monetary situations like the one that had arisen soon after the Britain’s decision to exit from European Union.
“At that time, there was an overnight steep fall in British Pound ”, he said.
Bankers Club
Mr. Shanmugam reiterated the need to revive the ‘Bankers Club’, which according to him, was once functioning in Tirupur cluster. “The said club comprising bank officials had been an informal platform to discuss the ways for improving credit flow in the cluster”, he said.
The bank officials said the delays in sanctioning loans were mostly because the textile entrepreneurs failed to give all necessary documents in a single shot.
Stressed assets
Deepak Chheda, the banking committee member at TEA, said the stressed assets of Rs. 3,000 crore in Tirupur knitwear cluster was only an accumulated figure over past few decades and it was minuscule when compared to many huge loans that turned non-performing assets elsewhere in the country. The exporters requested the credit rating agencies not to view the entire textile industry with a negative outlook so that banks would not hesitate to give loans.
Knitwear manufacturers and bank officials sit
face-to-face to
resolve issues
