Apparel Online India Magazine July 2nd Issue 2018 | Page 8

MIND TREE
Q-and-A
Recent scams and increasing NPAs are creating pressure on banking sector. At the same
time, balance sheets of apparel manufacturers, especially of exporters, are not showing good
indications, resulting in huge pressure on financial limits. Are you also facing the heat of liquidity…
How are you managing the working capital… What is the solution to this critical problem?
Rakesh Grover, CMD,
Groversons Group (Paris
Beauty), Delhi
We are not facing the heat
due to our strong balance
sheet, but no doubt banks are
more conservative and vigilant
from past few months. Their
outmoded approach is hurting
the country’ economy as well
as business opportunities for
many companies, especially
those that are comparatively
new or don’t have strong
finance. The banks have to
understand that a particular
firm can have good business
opportunities and requires
funding for the same. To
support them, as well as to
make own money secure,
banks should have more staff
to verify such firms, besides
their scope for further growth,
etc. rather than taking a
harsh stand in not supporting
them. Due to some negative
experience with one client,
banks should not apply the
same rules for all.
Davinder Sandhu, MD,
Davinder Sandhu Impex,
Ludhiana
Banks are not supporting
businesses at all. Their
documentation system,
which was fairly strong earlier
also, has now become more
stringent; they are taking
comparatively much more
time in most of the processes.
Even ad hoc limits take nearly
three months to get executed,
and loan is something we can’t
expect easily now. Banks are
now stricter about rating and
are going for three different
rating firms to make sure of the
credentials of a company, and
avoid taking any risks. They are
very much concerned about
the limit and not increasing the
same at all.
Due to change in laws in the
Middle East and VAT in Dubai,
buyers from these countries are
not much open. Our business is
mainly with these two markets,
so we have seen a downfall of
nearly 30 per cent in business.
To put more efforts and to
maintain business, we need
funding, but banks are not that
cooperative. This is one more
disadvantage for us. I strongly
feel that despite best efforts
by individuals like us or even
industry associations, we can’t
do anything on this issue. The
Central Government should
take some immediate steps in
this regard as banks can’t do
anything without Government
instructions.
The banks and the country
has now only one benefit in
this entire changed system.
Companies which were working
‘unethically’ do not have any
other option as banks check
their billing. There is neither
scope for over-invoicing, nor
getting funds, or any leverage.
8 Apparel Online India | JULY 16-31, 2018 | www.apparelresources.com
Vivek Lakra, Director,
Superfine Knitters,
Ludhiana
Due to poor management,
and poor governance in public
sector, unethical businessmen
have taken those (PSU banks)
for a ride by defaulting on
repayments. Apparel business
is one business which requires
huge money as it is capital
and labour intensive and has
longer rotation cycle. PSU
banks are not lending money;
and even private banks are
not taking stressed assets. We
are definitely facing the heat,
and somehow managing and
waiting for good days to come.
Rajendra Bhatia, MD,
India Today Fashions,
Jaipur
Yes, banks are becoming more
difficult, and garment exporters
are facing a hard time now.
But there is totally no support
from Government of any kind.
Forget about support, till date
there is not even a single rupee
credit of so-called GST return in
most of the exporter’s account.
These exporters are facing
hurdles in working capital.
Now the bankers are also not
as liberal as they used to be
before. Since we are facing
tough price competition from
China, Vietnam and other
neighbouring countries, most
of the exporters are focusing
on domestic business. Frankly,
exporters can’t survive without
Government’s support in the
form of incentives, like before.
Raj Kumar Sethia,
MD, High Street Fashions,
Jaipur
I have not seen any kind of
issue with our bank – it may
be due to our strong financial
standing, good and long-
term professional relations
with them. We always follow
systems and work accordingly,
and never ever delay any
payment. Even banks are
ready to give us loan but we
put our expansion plan on
hold for some time. Even in
my business circle, I have not
heard of bigger companies
than ours, or of similar size
facing any such issue.
Manoj Tulsani, Director,
Red Square Enterprises
(BTW), Ulhasnagar
Banks are under pressure right
from demonetisation, and now
that they have money with
them, their problems have
increased. As an organisation,
we are not much dependent
on the banks, so we have
not seen any major issue.
Our business is doing just
reasonably okay and there