Scheme may accompany new Industrial Policy; Bank agrees to expand MSME credit, review interest anomalies and hold industrial-estate camps

The Biz Reporter

In a major development for stressed businesses, J&K Bank Managing Director and CEO Amitava Chatterjee disclosed that the Bank is contemplating a lucrative Special One-Time Settlement Scheme, which may be unveiled alongside the new Industrial Policy being formulated by the J&K Government.

The disclosure became the focal point of a marathon meeting between J&K Bank’s senior management and a broad-based delegation of the Federation of Chambers of Industries Kashmir (FCIK). While the MD did not disclose the contours of the proposed scheme, he indicated that it was intended to provide meaningful relief and closure to stressed accounts.

FCIK welcomed the proposal but reiterated its demand for replication of SBI OTS-2020, without dilution, exclusively for borrowers in J&K and Ladakh. It said businesses in the region had accumulated legacy debt under circumstances unmatched elsewhere, including over three decades of turmoil, disruptions and natural calamities.

The meeting was chaired by Chatterjee and attended by Executive Director Sudhir Gupta; Chief General Managers Imtiyaz Ahmad, Ashutosh Sareen and Rajesh Tickoo Malla; General Managers Tariq Ahmad and Arshid Qadiri; Deputy General Managers Tanveer Farooqi and Shameem Ahmad; and other senior officers.

The FCIK delegation, led by Advisory Committee Head Shahid Kamili, included former Presidents Meraj Qureshi and Shakeel Qalander, besides elected Presidents of industrial estate-based and district-based associations from across the Kashmir Valley.

FCIK presented a comprehensive memorandum covering credit flow, revival of sick units, regularisation and restructuring of stressed accounts, interest rates, collateral requirements, delayed receivables, government-backed credit schemes, recovery practices, banking infrastructure and procurement from local MSMEs.

The MD responded to the issues individually, announced resolutions on several matters on the spot and issued instructions to the concerned officers. He assured greater credit flow through CGTMSE and other government-backed schemes and agreed to examine anomalies relating to higher interest rates in certain cases.

Chatterjee also accepted FCIK’s invitation to visit industrial estates and districts for direct interaction with entrepreneurs. The Bank will organise camps in association with local industrial bodies to assess credit requirements, present its financial products and resolve pending matters wherever possible.

FCIK said such outreach was essential as competing banks were entering industrial estates with attractive rates, concessions and loan-takeover offers. The Federation and its constituent associations offered to help protect J&K Bank’s traditional customer base, provided legitimate concerns were addressed through competitive and responsive services.

The Federation sought a dedicated MSME Facilitation and Resolution Cell under an Executive Director or Chief General Manager. It proposed that pending cases relating to additional finance, renewal, enhancement, regularisation, restructuring, revival and settlement be placed before the Cell for time-bound resolution.

Elected estate and district Presidents, along with FCIK representatives, offered to assist the Bank in finding mutually acceptable, case-specific solutions. FCIK also sought a temporary pause on coercive recovery against genuine MSMEs while their cases were examined, clarifying that the protection should not extend to fraud, wilful default or diversion of funds.

Other proposals included a rehabilitation package for potentially viable sick units, wider implementation of TReDS for delayed receivables, rational collateral and guarantee requirements, prompt regularisation of eligible accounts after clearance of arrears, and greater participation of proven local MSMEs in the Bank’s procurement.

FCIK appreciated the Bank’s profitability, improved asset quality and progress in priority-sector lending, including surpassing its lending obligations. While acknowledging improvement in the Credit–Deposit Ratio, it said greater local deployment of credit and balanced lending across all regions and sub-regions remained necessary.

With an estimated 40,000 or more manufacturing and processing units across J&K, FCIK said the revival of stressed enterprises and expansion of units operating below capacity offered the Bank a major credit opportunity.

The Federation also affirmed that J&K Bank must remain completely insulated from politics and should never become a tool for partisan interests. It should continue as a professionally managed commercial and developmental institution devoted to economic growth, productive investment and employment generation in J&K.

The meeting concluded with both sides favouring sustained institutional dialogue and amicable resolution of issues. FCIK expressed hope that a liberal and transparent Special OTS would give deserving borrowers a dignified exit from legacy debt and open a fresh chapter in the relationship between J&K Bank and the region’s business community.