Rush to sell Mumbai textile mills may help PSBs, FIs recover dues

Mumbai, March 27 | Updated: Mar 28 2005, 05:34am hrs
Nationalised banks and financial institutions (FIs) will be major beneficiaries in the sale of textile mill lands in Mumbai and their subsequent development.

Lenders are now in a position to recover dues worth around Rs 2,275 crore which they had lent to this sector. They could not realise their dues till now since many of the textile companies had turned sick.

Currently, backed by the 2001 amendment to Rule 58 of the Development Control Rules (DCR), various mills are selling their lands or entering into arrangements with developers for setting up malls. According to the data provided by the Indian Mill Owners Association (IMOA), private mill owners are expected to pay their Rs 2,275 crore outstandings to the banks and FIs.

Recently, the state-owned National Textile Corporation (NTC) has put one of its oldest mills Jupiter Mills on the block while the Piramal group is in the process of consolidating its various mill properties under one roof before their development and sale. FIs such as IDBI, ICICI Bank, IFCI and the nationalised banks that include SBI and Punjab & Sind Bank were the prime lenders to textile mills. Now that the textile companies are able to encash the land they have been holding onto, the lenders will be able to receive their long pending dues, a senior FI official said.

IMOA secretary general VY Tamhane said, Though, the modified DCR 58 was passed in 2001, the mill owners were in the process of settling various issues with their employees and institutions. Now, the development activity concerning the Mumbai textile mills will be on the fast-track.

The modified DCR 58 in 2001, allows owners of defunct mills to retain most of their land while reducing the area available for the city in terms of open space and low income houses. It also makes it obligatory for the mill owners to provide accommodation to the workers who have been residing in their buildings within the mill lands.