After the government started naming the beneficiaries of Roshni Act, the Jammu and Kashmir Bank has withdrawn its Roshni financing scheme and asked all its business units to seek fresh securities from those borrowers who have kept properties which come under purview of Roshni scheme as security for loans.
A senior J&K Bank executive informed that the decision has been taken after the government of Jammu and Kashmir declared the J&K State Land (vesting of ownership to the occupants Act 2001) commonly known as Roshni Act as "void ab-initio."
"A circular has been issued to business units to compile a list of borrowers who have kept properties which come under purview of Roshni Act as security and also seek additional securities from those who have already borrowed money using Roshni properties as mortgage"
A circular by the J&K Bank to its business units, reads as "Roshni Financing Scheme circulated vide S&BD circular 58 dated 26-05-2007, stands withdrawn w.e.f the date of scrapping of the Roshini Act by Govt of J&K."
"Furthermore, in order to compile the details of advances extended by the bank against the primary/collateral security of property (ies) acquired under the Roshini Act, all Business Units are advised to forward the details of such advances to Credit Monitoring & Management Department November 30, 2020."
"Meanwhile, some borrowers may offer properties acquired under Roshini Act as primary or collateral security or Bank may have taken properties acquired under Roshini Act as primary or collateral security in various credit facilities and in order to safeguard the interests of the Bank, Operative levels are advised to:-Ascertain that properties offered as primary/collateral security against any credit facility do not come under the purview of Roshni Act & ensure that no fresh credit facility is extended against the primary/collateral security of properties acquired under Roshni Act."
"Immediately put on hold any further disbursement inundisbursed/partially disbursed loans where properties acquired under Roshni Act are charged to the bank as primary or collateral security. However, such borrowers should be advised to provide alternate securities in place of existing securities, if any, falling under purview of Roshni Act," the circular adds.
The J&K government on October 31 declared all the actions taken under the Jammu and Kashmir State Land (Vesting of Ownership to the Occupants) Act, 2001, also known as the Roshni Act, as "null and void", and has decided to retrieve the land within six months.