For months now, Kashmir’s economy has been quietly slipping deeper into distress. The downturn triggered in April 2025 — accelerated after the Pahalgam tragedy — has left tourism, trade, handicrafts, transport, manufacturing, services and MSMEs struggling to stay afloat. Revenues have shrunk, defaults have risen and business confidence is at one of its lowest points in recent years. In this challenging moment, the proposals put forward by the Kashmir Chamber of Commerce and Industry (KCCI) during its meeting with J&K Bank’s leadership deserve serious consideration and urgent action.
The Chamber has rightly emphasised the pressing need for a Special One-Time Settlement (OTS) Scheme. Without a supportive settlement mechanism, thousands of small and medium units face the risk of collapse. The rising wave of SARFAESI possession notices—now appearing in newspapers almost daily—has created an atmosphere of fear and demoralisation within the business community. KCCI’s call for a temporary halt to these notices until a fair OTS framework is finalised is reasonable and necessary. Banking recovery processes cannot be blind to the ground realities of a fragile economy.
Equally important is the Chamber’s demand for rationalised interest rates, proper implementation of the CGTMSE scheme, and strict compliance with the RBI’s recent guidelines to support exporters hit by global disruptions. These measures are not concessions; they are stabilisers for an economy that depends heavily on MSMEs and export-linked livelihoods.
It is encouraging that J&K Bank has shown willingness to respond proactively, including by reducing interest rates in some segments and agreeing to hold awareness programmes in Srinagar. But the needs of the moment demand more—to ensure liquidity, prevent mass defaults, and rebuild economic confidence.
Kashmir’s economy cannot afford a cycle of closures and distress. The banking sector must stand as a partner, not merely an enforcer. KCCI’s proposals offer a practical, humane and forward-looking roadmap. It is now time to act decisively.
