Restructure of Loan to Textile Sector.

Press Information Bureau

Government of India

Ministry of Finance

08-August-2012 18:20 IST

Restructure of Loan to Textile Sector

An assessment study made by BOB Capital Markets indicated that loans of Rs.35,000 crore of Textile Units may have to be restructured by banks. Thereafter, the Government has advised all Public Sector Banks to set up a separate window for considering restructuring proposals from eligible borrowers in the textile industry on case-to-case basis. Reserve Bank of India (RBI) after examining the above mentioned study has opined that there is no need for any special regulatory dispensation and banks can provide two year moratorium on term loans and convert working capital into working capital terms loans with repayment period of 3-5 year as part of restructuring in terms of existing RBI guidelines.

Master Circular dated July 2, 2012 issued by RBI on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances inter-alia stipulates prudential guidelines on restructuring of advances.

The restructuring of the debt for the textile sector by banks has not financial burden on the Government. No time line has been prescribed for the said restructuring.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena, in written reply to a question in Lok Sabha today.

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