Expressing deep disappointment over the Special Rehabilitation/Revival package announced by J&K Bank Saturday for the food-affected people, noted economist and senior Peoples Democratic Party leader Dr Haseeb Drabu termed it as a “self-serving package” for the bank itself.
“It is a scheme without any substance and will provide no relief to any class of borrower be it traders, business houses or the retail consumer,” he said in a statement to KNS.
Dr Drabu claimed the package is misleading insofar as it announces a “repayment holiday”. “What the Bank has done is to fund the interest and repayment which effectively increases the burden on the borrower as the interest and repayment is being paid by increasing his loan. Effectively, the bank is paying the borrower’s interest and repayment for now and thereby assuring its income. As for the borrowers this is coming out of fresh borrowings which will have to be paid two years later. It is at best a deferment and at worst a moratorium without any interest or repayment relief in financial terms,” he said.
Dr Drabu said most importantly, the Bank delayed the implementation of the RBI master circular on debt relief for natural calamities the essence of which is speedy relief. “Coming three weeks after the devastating floods hit Kashmir, has violated the spirit and utility of the scheme,” he said and added that in fact there was no need for J&k Bank to seek approval from RBI.
“Instead, the Bank took the approval route for its own good and not the borrowers. The bank sought exemption from provisioning on the restructured assets which is not a part of the RBI master circular. The exemption from provisioning helps the bank in the short run even as it makes the bank weak in the long term,” e said and added that yet the Bank took time and jeopardized not only the borrowers’ interest but also its own long term interests.
Dr Drabu also said that the bank has not reduced the paper work and documentation for the borrowers in any way which is most required at the moment and helps speedy disbursal of credit and rehabilitation.
Dr Drabu also expressed dismay that all that the biggest and most profitable institution of the state with a turnover of 1 lakh crore and profit of more than Rs 1000 crore donated only Rs 5 crore to the CM’s relief fund. “It is petty which shows the dwindling emotional equity of the bank vis vis the people of the state,” he said.
Empathizing with the concerns of the traders and businessmen, Dr Drabu expressed full support to the programmes of the SERF and reiterated that if PDP comes to power, it will address all the concerns of the business community.