JK Govt to pursue for package to business community

As the Reserve Bank of India today announced moratorium on loans for three months in view of coronavirus pandemic, the Jammu and Kashmir Government will pursue RBI for a package for business community for losses incurred post August 5, 2019.

In August last year, the special status of J&K waswithdrawn by the Central government, leading to uncertainty and clampdown forseveral months.

   

Kashmir economy is already in dire straits due touncertainty post August 5 which lead to losses of Rs 18,000 crore and nowcoronavirus lockdown has brought the Valley’s economy to halt.

“We are seeking rehabilitation package for businesscommunity who have suffered losses since last year,” said a senior financedepartment official.

Speaking to Greater Kashmir, Chairman and Managing Directorof J&K Bank, RK Chibber, said “RBI package will be implemented in letterand spirit. However, J&K government as well as the Union Territory LevelBankers Committee is seeking a rehabilitation package for the business communityof J&K who have incurred losses from August last year,” he said.

A senior finance department official said that the ChiefSecretary J&K has directed the agencies concerned to take up the issue of arehabilitation package for big borrowers under ‘master directions on reliefmeasures by the banks in areas affected by calamities’.

“Considering the difficulties faced by the businesscommunity in UT of J&K, the following two resolutions were adopted by thehouse: (i) Reserve Bank of India be requested to consider large borrowers alsoas eligible for the Rehabilitation Package under Master Directions on ReliefMeasures by banks in the areas affected by natural calamity; (ii) Reserve Bankof India be requested to consider modification in the eligibility criterion forrehabilitation benefits” to the extent that “all eligible loans under MasterDirections which are not overdue as on 5th August, 2019 be reckoned forrestructuring,” read the Minutes of a meeting taken by chief secretary.

A communication by the RBI to J&K Bank, Convener ofUnion Territory Level Bankers Committee (UTLBC), had earlier read: “Alleligible loans under Master Directions, which are not overdue as on August 5,2019, may be reckoned for restructuring while old restructured accounts, whichare standard and not overdue (restructured only under Master Direction) may beconsidered only if they are affected by current disturbances.”

While the period for completing the restructuring exercisehas been extended up to June 30, 2020, big borrowers are not eligible for therehabilitation benefit.

However, the business community of Kashmir has been pushingfor extension of rehabilitation package to big borrowers as well as removal ofclause that account should not be overdue by August 5.

Prior to spread of coronavirus in India, a Kashmir Inc.delegation had met Union Home Minister Amit Shah and Finance Minister NirmalaSitharaman. During the meeting HM had assured Kashmir’s business community of arelief package.

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