With the increase in the corpus fund for India's first yarn banks in the Surat from Rs 1 crore to Rs 2 crore and bank guarantee reduced from 50 percent to 25 percent by the Ministry of Textile, the powerloom weavers in Pandesara and Ved Road industrial areas will be now able to procure yarn raw material for the polyester fabric-at concessional rates.

Two years ago, the central government had sanctioned two yarn banks in the powerloom clusters of Ved Road and Pandesara, country's largest man-made fabric (MMF) centre.

These banks were started with an initial corpus fund of Rs 1 crore for purchasing yarn from open market and selling at concessional rates to their initial 1,000-member weavers.

The yarn banks provide an opportunity to the weavers to arrest the price fluctuations and check the presence of middlemen. The yarn banks allow the weavers to procure yarn on credit and repay the amount in instalments.

The yarn bank serves twin purposes. Firstly, it gets yarn samples from around the world and store them. The domestic industry can get access to yarn samples of global standards and do further research and come out with innovative products. Second is the price benefit.

The ministry of textiles had also formed two special purpose vehicles, Ved Road Art Silk Small Scale Co-operative Federation and Pandesara Weavers Co-operative Society for setting up of the yarn banks.

An official of Ved Road Art Silk Small Scale Co-operative Federation said that there were more than one lakh weavers in Ved Road and Pandesara clusters and that the yarn bank is able to cater to only 100 units initially. The yarn is procured from frontline spinners in bulk quantity at concessional rates.

Pandesara Weavers Cooperative Society president Ashish Gujarati said that they are happy that the corpus fund at the yarn bank has been increased from Rs1 crore to Rs2 crore. They were able to cater to only 100 weavers at the bank, now around 200 will be able to get assistance. They have demanded that the corpus fund be increased to Rs15 crore.

Surat has around 5.5 lakh powerloom machines which produce three crore meters of fabrics every day and employ around seven lakh workers.