KL NEWS NETWORK
SRINAGAR
Regulator Reserve Bank of India (RBI) has not accepted the loan restructuring package that lead bank had submitted in October, sources said. The central bank has conveyed that the state government has not endorsed the scheme, as rules require.
With Kashmir literally closed for last 130 days, no work-no-business has triggered a serious economic stress as a result of which most of the loan accounts were not properly serviced. Any loan account that remains untouched for 90 days for want of installment becomes a sick account under the banking rules. A major portion of business accounts are on the brinks of getting bad as the market has not opened for a long time thus suffering secondary and most of the services sector.
Sources said the Lead Bank in the state had submitted a package to the RBI as early as October 1, 2016. After its perusal, the RBI has conveyed its regrets saying the structuring can not be permitting under “riots and disturbances” category because it has not been endorsed by the state government. Under the rules, competent civil administration authorities are supposed to endorse the request, which, sources said has not been done. RBI has conveyed its decision on Tuesday, according to sources.
Sources in the state government, however, said that they had already taken up the issue with the RBI.
A similar system was adopted in 2008 and 2010 when Kashmir remained closed for many months because of unrest.
