SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) said it regretted the action of JK Bank to seize an industrial unit at IGC Lassipora on Tuesday within just two months of downgrading of account of the enterprise.
“JK Bank officials forcibly took possession of an industrial unit M/s Mehfooz Agro Products at Industrial Growth Centre Lassipora on Tuesday which has been set up in 2017 by a highly educated young person who had topped in the MCA examination,” the FCIK statement said.
Offering details the statement said the unit is engaged in the processing and export of walnut, and almond kernels and had received a severe setback during Covid19.
“Despite this, the entrepreneur was regular in servicing his cash-credit facility of Rs 69.50 lacs and paying installments towards Guaranteed Emergency Credit Line (GECL) of Rs 14 lacs sanctioned in his favour under a scheme approved by GOI to combat the crises caused by the pandemic and guaranteed by GOI,” the statement said. “According to the promoter of the unit Shahid Gulzar, he had already paid back Rs 7 lacs out of Rs14 lacs of GECL and had also paid 50 thousand rupees during the month of May itself when his account was downgraded at the end of the month.”
Although the bank had demanded a payment of Rs 42000 more, the statement said, “yet he could not arrange and make for the reason that he was completely busy in the hospital with her ailing young wife who suffered from a terminal illness which was well in the knowledge of bank officials, explained the promoter”.
FCIK has regretted the harsh treatment meted out by the bank to this young highly educated entrepreneur which has the potential to shatter the faith and confidence of prospective entrepreneurs not only on the lending institutions but also on the government policies and schemes aimed to allure young minds towards entrepreneurship.
“It was beyond our comprehension to guess why the bank in the first instance had denied credit to this entrepreneur under the existing scheme of Credit Guarantee fund Trust for Micro and Small Enterprises (CGTMSE), which has been devised by GOI for such entrepreneurs and assured of collateral-free credit to them up to Rs 5 crore,” the FCIK asked while regretting the action. “The question also aroused as to why the bank instead of exploring other options including restructuring of the debt of the entrepreneur opted for seizing his property when that property valued at more than three times of the total outstanding.”
FCIK reiterated that the government must intervene at the earliest to put an end to the growing confrontation between enterprises and the bank.
A request was made to the JK Bank to offer the details of its action. So far, no response has come. The report will be updated as and when the bank responds.