Kashmir Economic Alliance (KEA), while expressing concern over attitude of banks operating in the valley towards borrowers has asked the banks to understand their social responsibilities in the turmoil hit region.
“KEA is highly concerned about the developments taking place at the hands of the banks viz a viz borrowers of the valley in particular. Besides, the KEA also understands that commercial considerations are important for banks and that is true for Kashmir as well. Banks while seeking private deposits and businesses have not only to extend services but also understand their social responsibilities and have to live upto the expectations of the people in general”, said a KEA spokesperson in a statement to KNS.
He said although the repayment and settlement systems are well laid down procedures, but they also need to be governed by realities on ground.
“Kashmiri business man in general has remained committed in his obligations towards lenders especially so to the lending banks. This in spite of the hardships he has been facing over the last 22 years and particularly during 2008,2009 and 2010, he may have got a couple of years respite in between but generally his business has suffered. Business community of the valley in general has suffered immense financial losses, in particular tourism, trade, transport and industry.”, the statement added
“However, the difference between a willful defaulter and a borrower in trouble has to be determined clearly, as most of the business community in Kashmir are borrowers in trouble and not willful defaulters, the past 20 years including 2008,2009,2010 have been a big catastrophe, bringing business fraternity virtually to a state of trauma, yet the same business fraternity of the valley paid interest on their borrowings to the banks and financial institutions.”
The KEA has asked banks to improve relations with their business partners and give them the respect they deserve. “Credit counselling would go a long way in eliminating the trust deficit. Weak and vulnerable businesses have to be given more time and confidence to succeed. Interest rates have to be guided by the present and past realities and not on future expectations particularly in vulnerable areas. KEA would like banks and their business partners to interact more often openly to understand the ground realities so as to improve relations ensuring success in the ventures undertaken”, it said.
“To persuade borrowers for recoveries might be within the domain of the banks and the financial institutions but the manner in which recoveries are made have attracted controversy and invited criticism and violence at times. Banks and their corporate partners need to understand ground realities and should amicably work to eliminate these irritants”.
The KEA has said that the RBI guidelines for Kashmir on recoveries and interest rates have to be more rational and humane. “Implementation of guidelines have also to be monitored so that their presence does not remain confined to rule books only. Such guidelines and relaxations have to be given wide publicity for borrowers to benefit from.”
“Having stated the plight of the business community of the valley, the financial institutions and the banks particularly Bank have never come to the rescue of their business partners rather charged them exorbitant rates of interest thus strengthening only their own institutions at the very cost of their business partners.”