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

The jute marketplace in West Bengal is going through complications due to the dearth of…

The jute marketplace in West Bengal is going through complications due to the dearth of functioning cash, as financial institutions have allegedly tightened the lending benchmarks for the sector, officers explained. The loan providers have been trying to get “clear land papers” from mills’ proprietors for extending financial loans, they explained.

At current, three main jute mills remained shut due to functioning cash crunch, marketplace resources explained.

“Lack of banking credit has strike numerous jute mills in the State. Mill proprietors are not receiving ample credit to operate their enterprises. Financial institutions make lending norms more stringent for land titles, which is made use of as collateral,” a jute mill promoter instructed PTI on problem of anonymity.

Workers of shut Weaverly Jute Mills at Shyamnagar in North 24 Parganas district allegedly ransacked the office environment of the device and torched two automobiles soon after the administration place up a detect to proceed the suspension of perform on Friday. The perform at the mill has been suspended considering the fact that January 29 as the promoters of the organization witnessed “a slowdown in business” and were having difficulties with “fund crunch”, resources explained.

“Following the alleged fraud perpetrated by billionaire jeweller Nirav Modi and Mehul Choksi, the financial institutions turn out to be added careful. They are trying to get crystal clear land papers just before sanctioning financial loans,” marketplace resources explained.

Indian Jute Mills Association chairman Raghavendra Gupta explained accessibility to bank credit in opposition to the land title is a challenge, though the State governing administration had introduced in a laws and subsequently, amended a law to solve the trouble. “Currently, lands of the mills belong to the State and had been supplied to the millers for a distinct reason. A laws and the amended law enabled the governing administration to provide land to mill proprietors for a lease of 99 a long time to solve this perennial title difficulty,” Gupta explained.

He hoped that the mills will be capable to source monthly three lakh bales of jute luggage to the governing administration.