SRINAGAR: The Kashmir Chamber of Commerce and Industry (KCCI) has voiced strong concerns regarding Jammu and Kashmir Bank’s recently unveiled special one-time settlement (OTS) scheme, “Karz-se-Mukti.” While acknowledging the Bank’s efforts to address non-performing assets (NPAs), the KCCI has urged the Bank to introduce significant modifications to the scheme to ensure it adequately meets the needs of the broader business community.
At the core of the Chamber’s critique is the Rs 5 crore cap on the outstanding principal eligible for settlement. The KCCI maintains that this ceiling excludes larger borrowers who are equally in need of relief, thereby undermining the scheme’s purpose. They have called for the removal of monetary caps, allowing the scheme to extend its benefits to a wider spectrum of borrowers. The Chamber has also highlighted that the scheme’s three-month validity period is too restrictive and recommends extending it to a minimum of one year, with provisions for reduced interest rates for extended repayment periods.
The KCCI has further expressed concerns about the scheme’s exclusion of cases where recovery suits have not been filed, terming this policy discriminatory. They argue that this distinction creates unnecessary barriers for certain borrowers and should be re-evaluated. Additionally, the Chamber has criticised the higher payment demands imposed on borrowers who have provided sufficient collateral, such as homes or other properties, suggesting that such measures penalise those who have acted in good faith.
Another significant issue raised by the Chamber is the exclusion of cases currently under investigation but without adverse orders. They propose a more pragmatic approach, allowing these cases to be included in the scheme while ensuring investigating agencies are informed.
In response to the scheme’s launch on January 1, JK Bank’s MD and CEO Amitava Chatterjee described “Karz-se-Mukti” as a landmark initiative aimed at helping borrowers with NPA accounts classified as Doubtful-I, Doubtful-II, Doubtful-III, and Loss/RLA. The scheme, designed for accounts with outstanding principal balances up to Rs 5 crore as of September 30, 2024, offers various incentives and concessions to borrowers for settling their dues. Speaking at the scheme’s unveiling, Chatterjee emphasised the Bank’s commitment to supporting genuinely distressed borrowers while maintaining financial stability.
The Bank’s leadership remains optimistic about the scheme’s potential to resolve liabilities and strengthen its NPA recovery efforts. However, the KCCI has called on senior figures, including Lieutenant Governor Manoj Sinha, Chief Minister Omar Abdullah, Chief Secretary Atal Duloo, and J&K Bank’s CEO Amitava Chatterjee, to reconsider the scheme’s design. They argue that the proposed modifications are essential for creating a truly inclusive and effective relief measure that balances borrower support with the Bank’s financial objectives.
