Meeting to frame Indian textile sector debt recast process (India)

Representatives of the Indian banking and textiles sectors are meeting today to formulate textile sector debt restructuring proposals on a case-by-case basis.

 

The meeting has been convened by the Ministry of Textiles after the Reserve Bank of India (RBI) gave a green signal for a two-year moratorium on terms loans as well as conversion of working capital into working capital term loan (WCTL) for a three-five year period.

 

The apex bank, however, rejected a proposal to revamp debt of the textile industry, which was expecting a Rs. 350 billion package, saying it is not justified at this stage.

 

There are around 450 textile companies across India, which are seeking restructuring of their loans, which includes Rs. 20-25 billion of working capital loan and Rs. 70 billion of term loan.

 

Today’s meeting is likely to consider setting up a special window in banks for accepting applications from textile mills seeking debt recast. It would also discuss monitoring the process of rescheduling the loans as well as decide on a time-frame to complete the same.