One of the main requirements for sanction of assistance under the TUF Scheme will be the availability of competent management to the unit concerned to carry out the modernisation programme and also to manage the operations of the unit efficiently. Towards this end, lending agencies may stipulate conditions relating to broad-basing of the Board, appointment of senior technical/financial executives, professionalisation of the management and constitution of such committees as may be considered necessary.

            Since the success of the modernisation programme would, to a large extent, depend upon the availability of adequate working capital to achieve the full benefit of the modernisation programme, the units have to make adequate arrangements with their bankers for meeting working capital requirements.

The nodal agencies under the scheme for different segments are as follows:

The nodal agencies may co-opt other All India Financial Institutions (AIFIs)/ state financial corporations (SFCs) / state industrial development corporations (SIDCs) and commercial/cooperative banks in the scheme for sanction and disbursement of loan so as to have a better reach. However, there will be no erosion in the rate of the interest reimbursement available to the borrower on account of such linkages.

Applications for assistance under the Fund Scheme may be submitted in the prescribed form available from the concerned nodal agencies or co-opted AIFIs/SFCs/SIDCs/commercial/co-operative banks, as the case may be.

A special cell will be set up by the financing institutions for expeditiously processing loan applications.

The nodal agencies will furnish periodically information in respect of sanction and disbursement of the loans and other related information to the Textile Commissioner. Such information in respect of the co-opted AIFIs/SFCs/SIDCs/commercial/co-operative banks will be co-ordinated and furnished by the nodal agency concerned to the Textile Commissioner.

Government has approved the placement of funds with the Nodal Agencies towards re-imbursement of 5% interest to the borrowers under the scheme on a quarterly basis in advance but not earlier than 15 days of the due date. In respect of foreign currency loan, exchange rate erosion not exceeding 5% p.a. will be covered. This will ensure the full reimbursement of 5% interest to the borrower without any dilution/erosion due to delay.

In respect of the co-opted financing institutions, nodal agencies will be rresponsible for verifying the interest reimbursement claims of the co-opted AIFIs/SFCs,SIDCs and commercial/co-operative banks and actual disbursement thereof.

            The Inter-ministerial Steering Committee under the Chairmanship of Secretary (Textiles) will lay down norms for a monitoring and appraisal mechanism for effective implementation of the scheme and may set up an appropriate machinery therefor. The Steering Committee would also periodically review the functioning of the scheme.

List of eligible machinery in Annexure A to G as referred to in para 2 of Part II of the Govt. Resolution is given in Section 4 of this booklet.