Tirupur exporters seek PM to reduce lending rates

Tirupur: Garment manufacturers from Tirupur have written to Prime minister Narendra Modi requesting him to reduce the prime lending rate by financial institutions in the wake of recent increase in Repo rate by RBI.
In a letter sent on Friday to PM Modi, Tirupur Exporters and Manufacturers Association (TEAMA) president M P Muthurathinam pointed out that the recent 35 basis point increase in repo rate by RBI to 6.25% was the fifth hike this year. ``The increase in repo rate will result in increase of prime lending rate by financial institutions, which will have direct bearing on the cost of funds to textile units under MSME sector,’’ he said.
The textile and garment industries are already saddled with high cost of fuel, electricity and yarn prices, he said. This increase of input costs spiked the selling price of garments, rendering Tirupur garment sector unable to compete globally with the cheaper price offered by the competitors in China and Bangladesh, he said, while requesting for lower prime lending rates. In the letter, Muthurathinam also requested him to increase the upper limit of total funded loan balance to rupees one crore, so as to protect borrowers from financial institutions invoking Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act . At present the financial institutions attach mortgaged properties of distressed borrowers and bring them to auction hastily under SARFAESI Act, he charged.