Apparel industry has urged for instalment in repayment of Funded Interest Term Loan (FITL) and extension of Interest Equalisation Scheme.
Raja M. Shanmugham, President, Tirupur Exporters’ Association (TEA) said that RBI had decided to permit lending institutions to convert the accumulated interest on working capital facilities over the total deferment period of 6 months (i.e.,1 March 2020 up to 31 August 2020) into a FITL which shall be fully repaid during the course of the current financial year, ending 31 March 2021.
Due to many challenges like COVID-19, high yarn price or low market sentiments, apparel manufacturers,especially MSMEs, are struggling to sustain in the business and they are finding it difficult to repay the FITL.
In view of the gravity of the situation, TEA has appealed to the Finance Minister to permit for repayment of FITL in six equal monthly instalments, which will help the MSMEs in knitwear sector revive, sustain and strive for the growth of the units.
Raja further added that after approval of Government, RBI had permitted for extension of Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit with same scope and coverage up to 31 March 2021 and the extension was from 1 April 2020 and ends on 31 March 2021, covering a period of one year.
He informed that 5 per cent interest subsidy is given on Pre and Post Shipment Rupee Export Credit for MSMEs and 3 per cent interest subsidy for non-MSMEs.
As the competitiveness has to be maintained by the MSMEs, 95 per cent of apparel exporting units are in MSME, another requisition was also made to Finance Minister to advice RBI to permit for extension of Interest Equalisation Scheme for another 3 years, which will help the MSME exporting units to work out their costing accordingly and strive to take more export orders and sustain in the business.
