Srinagar, Feb 18: The Federation of Chambers of Industries Kashmir (FCIK) has formally submitted a comprehensive representation to the Chief Minister Omar Abdullah outlining practical and urgent measures for the Special One-Time Settlement (SOTS) Scheme currently under active consideration of the J&K Bank management.
According to a statement issued here, the representation, copies of which have also been shared with senior Government authorities and the management of Jammu & Kashmir Bank, underscores the urgent need for a structured framework to resolve long-standing legacy MSME NPAs, restore entrepreneurial confidence, and provide a clear, actionable pathway for distressed units to restart operations—paving the way for a sustainable and renewed revival of the regional economy.
The submissions call for the Government’s support, as the major equity holder in J&K Bank, in formalizing a calibrated, non-discretionary, and non-discriminatory SOTS, distinct from routine OTS frameworks, to serve as a structured legacy-closure instrument.
Such a scheme, FCIK notes, would enable recovery of otherwise stuck assets, provide balance sheet clarity to the Bank, restore entrepreneurial dignity, revive credit culture, and unlock fresh economic activity. The proposal draws upon regulatory precedents issued by the Reserve Bank of India and settlement schemes implemented by leading public sector banks, aligning the framework with contemporary MSME classifications and current economic realities.
Highlighting the unique relationship between the people of the region and J&K Bank, FCIK recalls that during decades of turbulence, the Bank remained the principal financial lifeline while most other banks and institutions withdrew operations.
“However, the people reciprocated by placing extraordinary trust in the institution, shifting their deposits to the Bank, with over 90 percent of funds still originating from within the Union Territory,” FCIK noted, emphasizing that this stable, low-cost funding base has underpinned consistent growth and record profitability for the institution.
Drawing on RBI guidelines and national precedents, FCIK proposed that the SOTS cover NPAs up to at least 50 crore. The suggested framework includes waiver of unapplied and penal interest, rational principal settlement with calibrated haircuts, inclusion of failed OTS, technically written-off accounts and cases under litigation, delinking relief from collateral value, reduced 5% upfront amount for application processing, repayment window up to 2 years and a transparent, rule-based mechanism without subjective exclusions.
The objective may not be concessions but closure—cleaning up historical NPAs, restoring entrepreneurial dignity, unlocking stuck capital, and enabling fresh credit expansion.
FCIK has expressed deep concern over the daily-based resurfacing of daily SARFAESI “name and shame” notices and e-auctions in local newspapers, following a year of significant restraint during which the Bank’s leadership had repeatedly assured borrowers of a forthcoming solution.
RK News
Leave a comment