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

The jute industry in West Bengal is facing issues thanks to the dearth of performing capital, as financial institutions have allegedly tightened the lending criteria for the sector, officers explained. The loan providers have been trying to find “clear land papers” from mills’ proprietors for extending loans, they explained.

At current, a few important jute mills remained shut thanks to performing capital crunch, industry resources explained.

“Lack of banking credit rating has hit quite a few jute mills in the Condition. Mill proprietors are not receiving ample credit rating to operate their corporations. Banking companies make lending norms far more stringent for land titles, which is utilised as collateral,” a jute mill promoter instructed PTI on affliction of anonymity.

Employees of shut Weaverly Jute Mills at Shyamnagar in North 24 Parganas district allegedly ransacked the place of work of the unit and torched two autos soon after the management set up a see to continue on the suspension of get the job done on Friday. The get the job done at the mill has been suspended because January 29 as the promoters of the business witnessed “a slowdown in business” and ended up struggling with “fund crunch”, resources explained.

“Following the alleged fraud perpetrated by billionaire jeweller Nirav Modi and Mehul Choksi, the financial institutions turn into further cautious. They are trying to find obvious land papers before sanctioning loans,” industry resources explained.

Indian Jute Mills Association chairman Raghavendra Gupta explained accessibility to lender credit rating against the land title is a problem, however the Condition authorities had brought in a laws and subsequently, amended a regulation to address the issue. “Currently, lands of the mills belong to the Condition and had been specified to the millers for a precise function. A laws and the amended regulation enabled the authorities to offer you land to mill proprietors for a lease of 99 years to address this perennial title concern,” Gupta explained.

He hoped that the mills will be equipped to supply monthly a few lakh bales of jute bags to the authorities.