Coimbatore: Southern India Mills' Association hailed the RBI for slashing key repo rate by 50 basis points to bring it at 6.75 per cent and said the move will greatly benefit the capital intensive textile industry to improve its competitiveness in the globalised environment. In a statement, SIMA chairman M Senthilkumar appreciated efforts made by the RBI in bringing the guideline for base rate so that the banks follow a uniform procedure. The predominantly cotton based textile industry has been facing several challenges in the last 18 months, including a glut in domestic and global markets, high tariff rates in all major markets compared to competing nations like Vietnam,Pakistan, Cambodia, and more so high cost of funding.
Thanking the RBI Governor, Prime Minister and Finance Minister for favourably considering the pleas of the industry, particularly the textile industry and constantly reducing the interest rate, Senthilkumar urged Indian Banks Association and banks to fully pass on the benefit to customers so that the industry would benefit when it is facing a financial stress. He pointed out that only some banks had passed on 0.4 per cent benefit and others only 0.25 per cent benefit and said the reduction in interest rate will bring in more investments and make the 'Make in India vision a reality.
