The Reserve Bank is learnt to have turned down the government proposal to restructure textiles sector loans worth Rs 1 lakh crore, mostly from the PSU lenders, stating it would not be “the best international practice“.
It was the proposal of the Textiles Ministry, which is under the additional charge of Commerce and Industry Minister Mr Anand Sharma, to rework the loans for the industry which has been facing difficult times owing to adverse global scenario and demand slowdown in the domestic market.
A moratorium on repayment of loans was also suggested by the ministry, but the central bank did not find it desirable, an official said.
The industry has been clamouring for relief from the government on the plea that high interest rates have hit hard the silk, spinning and power-loom units.
As per the Confederation of Indian Textile Industry, out of 287 companies listed on the Bombay Stock Exchange, 122 firms had reported net loss in the first quarter of 2011-12.