Tea industry appeals for direct financing to corporate planters

Kolkata, Jun 15 (UNI) The Tea Industry has appealed to the Reserve Bank of India to allow 100 per cent direct financing to corporates who have more than Rs one crore exposure.

Indian Tea Association Secretary General Manojit DasGupta told UNI that the corporates, who have own plantation with exposure of around Rs 3 to 4 crore, would benefit if direct financing is available.

Currently, the apex bank, according to a notification on "Lending in the Priority Sector" dated April 30, has said only those sectors that impact large sections of the population, the weaker sections and the sectors which are employment-intensive such as agriculture, and tiny and small enterprises should be eligible for inclusion under the priority sector. ''Therefore, direct financing would be available to small farmers, which would be less than one crore,'' he said.

In this context, the RBI notification also said an Internal Working Group was set up by the Reserve Bank to examine the need for continuance of priority sector lending prescriptions; review the existing policy on priority sector lending including the segments constituting the priority sector, targets and to recommend changes.

''We have written to RBI to allow us to get 100 per cent direct financing. We are yet to get a response,''Mr DasGupta said.

United Bank of India, which has Rs 400 crore exposure in the tea industry, has also applied to RBI to reconsider the norm, which mentions that direct financing would be available only up to Rs one crore and any exposure above Rs one crore would be indirect financing. The banks are also concerned about this new norm because in case of reduction of exposure in priority sector lending above one crore would mean that the banks have to increase exposure in other areas which below one crore.

Currently, in the tea industry alone, the banks have an exposure of Rs 1220 to 1400 crore.' UNI