Indian textile and apparel industry is going to benefited from the Reserve Bank of India (RBI) decision of one-time restructuring of loans up to Rs 25 crore for MSME (Micro, Small and Medium Enterprises) sector. The RBI has allowed a one-time restructuring of existing loans to troubled MSMEs under certain conditions. The decision will support small and medium-sized companies who have been struggling to repay their loans.
The Indian textiles industry, which is currently estimated at around US $ 108 billion, is expected to reach US $ 223 billion by 2021. Majority of companies in the textile and clothing industry is from the MSME sector.
Apparel manufacturers believe that this kind of restructuring would be helpful to the concerned MSMEs in exports business to get revived and continue in the business.
The RBI also asked banks to make a provision for an additional 5 per cent of the loans they restructure under the new policy and directed the lenders to implement the scheme by the end of March 2020.