Committee On NTC Mills Debt Recast Likely

New Delhi, Nov 10: | Updated: Nov 11 2003, 05:30am hrs
Public financial institutions/banks do not have a clear picture yet of the debt restructuring scheme for viable and potentially viable textile mills notified by the government nearly two months back. A meeting of the high-level committee headed by textile secretary SB Mohapatra may therefore be called soon to make known the role to be played by FIs/ banks which are already members of the panel for smooth implementation of the scheme, according to Indian cotton mills federation (ICMF).

The scheme follows the introduction of a mechanism to recast debt portfolios of viable and potentially viable textile units mooted in the budget.

The scheme has also been extended to units with a minimum debt exposure of Rs 2 crore. Besides there is no change in the total amount of debt exposure which stands at Rs 6,000 crore against Rs. 10,000 crore estimated earlier. The contraction of debts has been due to high interest at 15-16 per cent on loans earlier availed by the units. Now, the repayment can be made at 8 to 9 per cent interest.

The differential is sought to be bridged by allowing banks to raise external commercial borrowings at lower interest for a period of five years only.