Bengal jute industry hit by fund crunch as banks set stringent credit norms

The jute business in West Bengal is going through difficulties because of to the dearth of working funds, as banks have allegedly tightened the lending benchmarks for the sector, officials explained. The loan providers have been trying to get “clear land papers” from mills’ entrepreneurs for extending financial loans, they explained.

At existing, three big jute mills remained closed because of to working funds crunch, business resources explained.

“Lack of banking credit history has hit many jute mills in the Point out. Mill entrepreneurs are not obtaining satisfactory credit history to run their businesses. Banking companies make lending norms much more stringent for land titles, which is used as collateral,” a jute mill promoter told PTI on situation of anonymity.

Staff of closed Weaverly Jute Mills at Shyamnagar in North 24 Parganas district allegedly ransacked the business office of the device and torched two autos just after the management set up a observe to proceed the suspension of perform on Friday. The perform at the mill has been suspended considering that January 29 as the promoters of the corporation witnessed “a slowdown in business” and have been battling with “fund crunch”, resources explained.

“Following the alleged fraud perpetrated by billionaire jeweller Nirav Modi and Mehul Choksi, the banks turn out to be extra cautious. They are trying to get obvious land papers right before sanctioning financial loans,” business resources explained.

Indian Jute Mills Affiliation chairman Raghavendra Gupta explained access to bank credit history in opposition to the land title is a obstacle, though the Point out government experienced brought in a legislation and subsequently, amended a regulation to fix the dilemma. “Currently, lands of the mills belong to the Point out and experienced been supplied to the millers for a certain objective. A legislation and the amended regulation enabled the government to offer you land to mill entrepreneurs for a lease of ninety nine a long time to fix this perennial title problem,” Gupta explained.

He hoped that the mills will be equipped to supply regular three lakh bales of jute luggage to the government.