SRINAGAR : Jammu and Kashmir Bank is contemplating a special One-Time Settlement (OTS) scheme for stressed borrowers in Jammu and Kashmir and may unveil it alongside the new Industrial Policy being formulated by the Union Territory administration, Managing Director and Chief Executive Officer Amitava Chatterjee has said.
Chatterjee made the disclosure during a marathon meeting with a delegation of the Federation of Chambers of Industries Kashmir (FCIK), where a range of issues concerning the industrial sector, including stressed accounts, credit flow, interest rates, collateral requirements and revival of sick units, were discussed.
While the Bank’s MD did not disclose the contours of the proposed scheme, he indicated that it was aimed at providing meaningful relief and closure to stressed accounts.
FCIK welcomed the proposed OTS but reiterated its demand for replication of the State Bank of India’s OTS-2020 scheme, without dilution, exclusively for borrowers in J&K and Ladakh. The Federation said businesses in the region had accumulated legacy debt under circumstances distinct from those in other parts of the country, citing decades of turmoil, disruptions and natural calamities.
The meeting was chaired by Chatterjee and attended by Executive Director Sudhir Gupta, Chief General Managers Imtiyaz Ahmad, Ashutosh Sareen and Rajesh Tickoo Malla, General Managers Tariq Ahmad and Arshid Qadiri, Deputy General Managers Tanveer Farooqi and Shameem Ahmad, besides other senior officers.
The FCIK delegation, led by Advisory Committee Head Shahid Kamili, included former presidents Meraj Qureshi and Shakeel Qalander, besides elected presidents of industrial estate- and district-based associations from across the Kashmir Valley.
The Federation presented a detailed memorandum covering issues related to credit flow, revival of sick units, regularisation and restructuring of stressed accounts, interest rates, collateral requirements, delayed receivables, government-backed credit schemes, recovery practices, banking infrastructure and procurement from local MSMEs.
Chatterjee responded to the issues individually and announced resolutions on several matters on the spot, besides issuing directions to the concerned officers.
He assured the delegation of greater credit flow through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and other government-backed schemes. He also agreed to examine cases involving alleged anomalies in interest rates.
The Bank also agreed to hold outreach camps at industrial estates and in districts to facilitate direct interaction between its officials and entrepreneurs. Chatterjee accepted FCIK’s invitation to visit industrial estates and districts, with the Bank expected to organise the camps in association with local industrial bodies.
The camps will assess the credit requirements of businesses, familiarise entrepreneurs with the Bank’s financial products and facilitate resolution of pending issues wherever possible.
FCIK said such outreach had become necessary as competing banks were increasingly approaching industrial estates with attractive interest rates, concessions and loan-takeover offers. The Federation and its constituent associations offered to help retain J&K Bank’s traditional customer base, provided genuine concerns of borrowers were addressed through competitive and responsive banking services.
The Federation also sought the establishment of a dedicated MSME Facilitation and Resolution Cell under an Executive Director or Chief General Manager. It proposed that cases involving additional finance, renewal, enhancement, regularisation, restructuring, revival and settlement be referred to the Cell for time-bound disposal.
Elected presidents of industrial estates and districts, along with FCIK representatives, offered to assist the Bank in working out mutually acceptable, case-specific solutions for stressed businesses.
FCIK also sought a temporary pause on coercive recovery measures against genuine MSMEs while their cases were being examined. It, however, clarified that such protection should not extend to cases involving fraud, wilful default or diversion of funds.
Among other demands, the Federation sought a rehabilitation package for potentially viable sick units, wider implementation of the Trade Receivables Discounting System (TReDS) to address delayed payments, rationalisation of collateral and guarantee requirements, prompt regularisation of eligible accounts after clearance of arrears and greater participation of established local MSMEs in the Bank’s procurement.
FCIK also appreciated the Bank’s profitability, improved asset quality and progress in priority-sector lending, including the Bank’s achievement of lending obligations.
While acknowledging improvement in the Bank’s Credit-Deposit Ratio, the Federation stressed the need for greater deployment of credit within the region and balanced lending across different regions and sub-regions.
With an estimated 40,000 or more manufacturing and processing units operating across J&K, FCIK said the revival of stressed enterprises and expansion of units functioning below capacity represented a significant credit opportunity for J&K Bank.
The Federation also emphasised that J&K Bank should remain insulated from political influence and function as a professionally managed commercial and developmental institution focused on economic growth, productive investment and employment generation.
The meeting concluded with both sides agreeing on the need for sustained institutional dialogue and amicable resolution of issues.
FCIK expressed hope that a liberal and transparent Special OTS would enable deserving borrowers to secure a dignified exit from legacy debt and help open a new chapter in the relationship between J&K Bank and the region’s business community.
