Srinagar, Aug 3: The Federation of Chambers of Industries (FCIK) has solicited the immediate intervention of the government of Jammu and Kashmir in resolving the issue of NPAs and stressful accounts in order to put an end to growing confrontation between J&K Bank and the business community.
In a statement, valley’s apex industrial chamber has regretted the harsh recovery process let loose by J&K Bank despite clear instructions from Union Ministry of Finance to deal with the issue with utter sensitivity and humane approach. The harassment, intimidation and physical dispossession of inmates from their residential houses in the name of standard operational procedures (SOPs) is just not acceptable to the business community and the society of Jammu and Kashmir which has been instrumental in growth of J&K Bank to its current position.
While expressing anguish over recent bank action against a borrower, whose account was reportedly downgraded just five months back, FCIK said that such an action was fraught with severe consequences on the relations and mutual trust of entrepreneurs with the bank. The brewing anger expressed by masses on social media over forcible eviction of a 95-year old lady from her residential house, in the instant case, should be read by the bank authorities as writing on the wall.
The action has also caused shockwaves across entrepreneurial community with the prospective entrepreneurs seriously thinking of abandoning their plans to adopt entrepreneurship as their means of livelihood. If the bank justified attachment of a collateral security within 6 months of the failure of entrepreneur to serve interest for any reason, then why has there been a leniency in recovery of loans from outside businessmen against whom there is a whopping outstanding amount of 6044.03 Crores as NPA, as officially declared on 30th June, 2023; questioned FCIK, adding that in some of the cases money of J&K Bank is pending recovery for a decade or so. While the amount in NPA with outside enterprises accounted for 58% of total deposits made by people from outside J&K, the total NPA balance of 3412.10 Crores against the borrowers of J&K accounted for just 3% deposited by the people of J&K with the bank.
The banks needed to understand and ascertain the failure of enterprises in paying their due installments or interest on time before taking any harsh action against them; observed FCIK , adding that there were overwhelming cases where the due payments to the enterprises were held up by buyers including the government departments. The perpetual losses incurred by the enterprises of Jammu and Kashmir during past over three decades cannot be wished away while treating the borrowers, observed FCIK; adding that J&K Bank cannot also shun its responsibility for overburdening the entrepreneurs by adopting methods of servicing accounts through creation of overdrafts.
FCIK had already cautioned the UT government on misadventures of J&K Bank which were against the very spirit of the SARFEASI ACT and had potential to public outcry and misgivings among entrepreneurs. This was high time for the government to step in and find a viable solution to the chronic problem of NPAs and stressful accounts before the situation took any ugly turn.
FCIK has also conveyed its appreciation to the trade organisation from downtown Srinagar for helping the evicted family and mustering public support and sympathies for it. FCIK assured to support any endeavor that brings relief to the business community from all problems and difficulties.
