Weavers To Get Boost From PNB, Rs. 2 Lakh To Be Availed Under Ministry of Textile Scheme

The textile industry is primarily concerned with the design, production and distribution of yarn, cloth and clothing.

Punjab National Bank has launched a credit card plan under which loans up to Rs 2 lakh will be granted to weavers under the PNB Weaver Mudra Scheme (PNBWMS) as per the scheme of the Ministry of Textiles.

The bank launched the scheme on Thursday to facilitate cash credit or loan to weavers against their credit requirements. 

The scheme is launched on the eve of ‘National Handloom Day’.

The scheme was prepared by the bank after having a detailed discussion with the Ministry of Textile, the aim of the product is to finance working capital needs of weavers (up to Rs 50000 to be categorized under Shishu and for above Rs 50000 and up to Rs 5 lakh to be categorized under Kishore category), with respect to margin money subsidy, interest subsidy and credit guarantee feed the Government of India will extend financial assistance.

The Government will bear a margin of 20 percent of the cost of the project (working capital) with a maximum of Rs 10000, while the rest of the amount will have to be borne by the borrower, according to margin conditions.

Once the loan is sanctioned, the margin money subsidy will be credited to the account of the borrower. All these accounts will be covered under the credit guarantee scheme of credit guarantee corporations. 

Covid-19 impact on Indian textile industry

Both exports and domestic sales are falling, because the Covid-19 pandemic is primarily expected to adversely impact exports and with second-order impact on the domestic markets 

The pandemic has affected the majority of India’s export market (the US and EU together constitute for approximately, 60% of the total apparel exports from India in value terms), causing order cancellations/deferral of order leading to inventory build-up and expectation of slower realization of export receivables leading to higher working capital requirements.

Apparel exports are expected to fall due to drying up of order in the last quarter of FY20, working capital issues and lack of clarity on the duties and incentives.

Domestic consumption is getting affected too because of all India shutdown. Due to apparel sources for the upcoming summer season, new store openings have stopped and even domestic stores are facing an inventory build-up. Further, domestic prices could be negatively impacted and margins will reduce even more if exporters dump their inventories in the domestic market. This could lead to short term blips such as reduced employment of casual labor (factory closures and people moving back to their home towns) and reduced consumption.

The objective of the scheme

The scheme aims to provide adequate and timely assistance to weavers by way of cash credit or loan by way of loan or cash credit for their credit requirements such as investments and working capital flexibly and cost-effectively in both rural and urban areas.

PNB launched PNBWMS because the Ministry of Textiles wanted options for working capital needs of weavers under ‘Shishu’ and ‘Kishore’ Category along with the issue of the MUDRA card.

Shishu, Kishore and Tarun categories

This scheme will help the textile industry to meet their working capital needs and hopefully, the industry should get back on track by 2nd to 3rd Quarter of 2020.


  1. Eligibility: -Existing Handloom Weavers are eligible, having satisfactory CIBIL. 
  2. Purpose: For working capital requirements (W.C.R.) of the weaver. 
  3. Extent of Loan: Need-based limit, max. Rs. 5.00 lakh. 
  4. Type of Facilities: Only OD/Cash Credit facility will be provided for working capital requirements.
  1. Govt. Support 

(i). Margin money subsidy @20% of the loan, Max. Rs.10000/-, by MoT, GoI. 

(ii). Interest subsidy: 6% shall be borne by the borrower and in excess to it by the Govt. (Max. upto 7% for 3 yrs. from date of disbursement.) as interest subsidy, in standard accounts. 

(iii). CGTMSE Fees 

 Loans upto Rs.50000/- :- 0.25% of loan amount by Govt., for 3 years. 

 Loans above Rs.50000/-& upto Rs.5 lakh By Govt. for 3yrs. 

  1. Only OD/Cash Credit facility will be provided for working capital requirements. 
  2. Mudra Card (Rupay Card), having a limit upto Rs.50000/, will be issued under this scheme. The money can be withdrawn by the weaver anywhere, anytime from  ATM of the bank, as per his requirements.


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