Fresh flavour

Calcutta, Jan. 23: Banks are willing to finance tea companies with good creditworthiness even as the Indian Banks’ Association (IBA) take up the issue of tea financing package tomorrow.

Indian Tea Association chairman C. K. Dhanuka said, “We can see banks have started taking some interest in the tea sector once again. This may be due to the slight recovery in the tea industry.”

“Banks are willing to provide funds to companies with good creditworthiness. They are a little shaky about firms with a poor track record. But once IBA takes a look at the industry’s demand it will become easier for us to get funds,” he added.

A senior official of United Bank of India said, “We are keen to provide funds to the tea sector. We know that they have been passing through bad times. However, of late there has been some recovery in the prices of tea. We feel that the financial health of the companies will also recover and it will be easier for us to finance them.”

The tea industry has asked IBA to reduce the rate of interest to 9 per cent from the prevailing prime lending rate of 11.5 per cent and convert a portion of the working capital loan to term loan. The total working capital loan from banks is to the tune of Rs 1,800 crore.

“Tea is one of the major areas of investment. But we also have to remain cautious while granting loans to the sector so that they do not turn into non-performing assets. But we have also heard that the tea industry is showing some recovery. We may take a re-look at the sector,” the official added.

Meanwhile, the Bengal government has decided to take a stand on the closed gardens in the Dooars after discussing with the management and the trade unions.

The tea committee set up by the state government and chaired by the state commerce and industry secretary has submitted a report on the tea industry to chief minister Buddhadeb Bhattacharjee and state labour minister Mohammad Amin.

The state government has convened a meeting with the owners of closed tea gardens on February 5 followed by a separate round of discussion with the gardens’ trade unions the next day. After obtaining views of both the sides, the government would take a decision, state government officials said. They, however, did not specify the kind of steps the state would take to resolve the crisis in the tea gardens.