Srinagar: In a significant development, the Government of Jammu and Kashmir has constituted a special committee to address one-time settlement (OTS) cases faced by Micro, Small and Medium Enterprises (MSMEs).
According to the order, a copy of which has been obtained by Ziraat Times, titled “Constitution of Committee for addressing One-Time Settlement (OTS) cases faced by MSMEs,” issued on April 8, 2024, the committee’s purpose is to look into outstanding issues related to OTS requests from MSMEs, following the guidelines set forth by the Reserve Bank of India (RBI).
The committee will be chaired by the Principal Secretary to the Government, Finance Department. Other members include the Commissioner/Secretary to the Government, Industries & Commerce Department and the Executive Director, J&K Bank.
The committee will also clarify and publicize these guidelines for the benefit of all stakeholders.
This move by the Jammu and Kashmir government comes after hectic efforts by industry chambers in both Kashmir and Jammu regions seeking a more practical and negotiated settlement of non performing assets cases in J&K.
Federation Chambers of Industries Kashmir (FCIK) has been advocating the government to address the challenges faced by MSMEs in settling their outstanding dues with banks and financial institutions.
One-time settlement (OTS) is a scheme announced by J&K Bank by which an MSME borrower negotiates a lump-sum payment with the lender to settle an outstanding loan. This approach has been found to be beneficial for both parties, as it allows the borrower to resolve their debt and the lender to recover some of the outstanding amount.
The MSME sector is a crucial component of the Indian economy, and the government has implemented various initiatives to support its growth and development. These initiatives, including J&K, include providing financial assistance, simplifying regulations, and enhancing access to markets.
