To facilitate credit access to the textile industry, senior officials from the finance and textiles ministries will meet with managing directors of all major public sector banks, today, 22nd July, according to sources.
In order to address structural barriers to credit flow, enhance working capital availability, and promote sector-specific lending frameworks, finance and textile secretaries will speak with the MDs of State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB), and other state-owned lenders.
As part of a larger effort to de-risk credit disbursal and unlock capital flows into the labour-intensive and export-driven textile sector, the Centre is looking to implement regulatory changes and incentive-based mechanisms to encourage banks to lend more to the sector, particularly micro, small, and medium enterprises (MSMEs), they said.
Improving MSMEs’ access to credit is considered as essential for creating jobs, boosting industrial competitiveness, and bolstering export resilience, as the government aims to quadruple textile exports to Rs. 9 lakh crore (US $ 10.41 billion) by 2030.
Interest rates are still somewhat high even though this sector is categorised as a priority. Liquidity is nevertheless hampered by complicated procedures, onerous paperwork, and delayed subsidy disbursement, particularly under programs like the Technology Upgradation Fund Scheme (TUFS).
The introduction of a textile-specific credit rating system, similar to CIBIL, is one of the ideas being considered in order to assist banks in more accurately evaluating the operational risks particular to textile units.
In order to support investments in water- and energy-saving technologies and to combine sustainability-related funding sources, a common green fund is also being investigated.
