KARACHI, Nov 12: The banks are ready to bail out the crisis-ridden textile industry provided the government takes complementary and long-term corrective measures to ensure their future viability.

This was resolved between members of the All-Pakistan Textile Association (Apta) and leading bankers in a recent meeting which was chaired by National Bank of Pakistan president Ali Raza.

The Apta delegation was led by its chairman Adil Mahmood, who along with other members, apprised the bankers about the crisis faced by the textile industry, in general, and spinners, in particular.

Sources privy to the meeting told Dawn that bankers were receptive and showed keen interest in resolving the financial problems being confronted by the industry.

There was a general consensus among bankers not to go for litigation, but to adopt a pragmatic approach for resolving the problems of the industry which is genuinely faced such issues which are beyond their control.

However, they were equally concerned that if they take unilateral steps to pull the textile industry out of the on-going crisis, it would be a futile exercise because bankers’ cannot alone solve problems.

It was stressed that bankers’ support should be supplemented by structural and corrective measures from government, and only then it could produce required results of salvaging the industry on a permanent basis.

The bankers were informed about the woes of the industry, and it was pointed out that a single factor of high cost of production was inflicting fatal blows to their viability, resultantly they have become uncompetitive in the world market.

The Apta members also apprised bankers about subsidies being given by other regional countries to their textile industry. The short cotton crop size resulting in higher prices was yet another reason for industry’s high cost of production.

The spinners said even this year cotton crop is below the target at 12.8 million bales from earlier estimates of 14.3 million bales. However, it was feared that the actual harvesting may be even lesser at 11 million bales.

When looked at industry’s actual consumption of 16 million bales, the spinners said there was a huge shortfall of over three million bales.

They lamented that under ‘Textile Vision 2005’ cotton output target was fixed at 15 million bales by the year 2005. The neighbouring country India, having similar soil and climatic conditions is poised to harvest record cotton crop of around 31 million bales. As a result of this, it has become a major player in the world market.

The industry also sought bankers’ help in formulation of a strategy wherein borrowers (industry) could have option under a well-planned and duly defined strategy because presently there were no bankruptcy laws in the country.