Yes Bank Crisis May Hit Jute Mills, Workers Wages Ahead Of Holi

The moratorium on Yes Bank Ltd. by Reserve Bank of India could have a rippling effect on the operating jute mills and wages of lakhs of workers associated with the industry just ahead of Holi.

According to jute industry sources, payments to mills got stuck in totality though 60 percent of the payment is not associated with Yes Bank. The Yes Bank crisis has led to halting in payment release for the mills. The immediate fallout is a threat over wages and advance payments to mill workers just ahead of the Holi festival, jute sector sources told PTI.

Approximately two lakh workers are associated with the jute mills in West Bengal and a large section of them are from Bihar and Uttar Pradesh, and Holi is a major festival for them, the sources said. In jute mills, wages are usually paid on the 7th and 21st of every month, mill officials said.

The RBI directive allows a maximum amount of Rs 50,000 withdrawal by any account holder. Transactions through debit cards, mobile apps, and UPI payments through various fintech have been blocked. Indian Jute Mills Association in a letter to Jute Commissioner highlighted that payments for supplies to Andhra Pradesh, Madhya Pradesh, and Telangana are made through the escrow accounts of Yes Bank.

An official at the Jute Commissioners office said till Thursday payments from Yes Bank have been cleared and steps are being taken to resolve the problem. Jute mills in West Bengal produce goods worth Rs 30 crore daily, jute industry sources said.