RBI rejects relief plea for JK borrowers

In a major concern, Reserve Bank of India has rejected the plea of State Level Bankers Committee seeking ‘restructuring/ rescheduling’ of loans of borrowers affected in the ongoing unrest in Kashmir.
RBI rejects relief plea for JK borrowers

In a major concern, Reserve Bank of India has rejected the plea of State Level Bankers Committee seeking 'restructuring/ rescheduling' of loans of borrowers affected in the ongoing unrest in Kashmir.

All the banks operating in Jammu and Kashmir under the banner of State Level Bankers Committee, of which J&K Bank is the convenor, had approached the central bank vide communication dated Oct 1, 2016, seeking relief measures (restructuring and rescheduling of loans of the affected borrowers particularly the business community) in the areas affected by ongoing unrest in the state, sources said.

Sources said the central bank after receiving the SLBC communication had sought JK government's report in this matter. "However, the state government slept over the matter and did not send its report to the RBI," sources said.

Receiving no report from the state government, the RBI has vide its letter dated Nov 15, 2016, communicated to SLBC that in terms of its "Master Directions on Natural Calamities 2016 dated July 1, 2016, only genuine persons duly identified by the state administration as having been affected by the riots/disturbances are provided assistance."

". . . It is imperative that the areas/people affected are identified to consider for the special dispensation," the RBI communication reads. 

"As the district collector/state government has not yet declared any area as affected by riots or disturbances, the special dispensation required by J&K Bank (SLBC convenor, J&K State) does not fall under our circular," the RBI communication reads.

According to experts here, this has come as a major setback to the borrowers, especially traders in Kashmir who have suffered massive business losses during the last about five months of unrest in Kashmir.

Experts blame the state government for sleeping over the matter. "The state government has been promising relief and rehabilitation to people affected during the turmoil in Kashmir. But the RBI rejection of relief to the borrowers has proved such promises hoax. Had the government been positive and serious about helping the borrowers in Kashmir, it would have endorsed the recommendations of JK SLBC," said a financial expert.

He added, "Not endorsing the plea of the JK SLBC seems a deliberate attempt by the JK government to derail businesses in Kashmir."

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