Srinagar, Jan 7: The Federation of Chambers of Industries Kashmir (FCIK) has expressed grave concern over reports of coercive recovery actions being initiated or contemplated by banks, including J&K Bank, under the stringent provisions of the SARFAESI Act against Micro, Small and Medium Enterprises (MSMEs) in Jammu and Kashmir. The Federation has called for an immediate, time-bound moratorium on all such actions, particularly those resulting in attachment and dispossession of entrepreneurs’ residential and productive assets.
FCIK has urged the Chief Minister of Jammu and Kashmir, the Deputy Chief Minister, the Advisor to the Chief Minister, and the top administrative leadership of the Union Territory to intervene urgently. It cautioned that indiscriminate enforcement of SARFAESI provisions at this sensitive juncture could inflict irreparable damage on the already fragile industrial ecosystem of the region.
“Banks undoubtedly have a legitimate responsibility to protect public funds, but a purely mechanical and coercive recovery approach risks wiping out enterprises that have survived decades of instability, prolonged shutdowns, natural calamities, and repeated economic shocks,” said Shahid Kamili, Head of the FCIK Advisory Committee comprising Presidents of Industrial Associations across the Kashmir Valley. “Forcing families out of their homes in the name of recovery not only erodes human dignity but also extinguishes entrepreneurial confidence and social stability,” he added.
The Federation underscored that the Government of Jammu and Kashmir is currently reviewing the Industrial Policy 2021–30, with a stated focus on revival, restructuring, and rehabilitation of stressed enterprises. FCIK strongly advocated that the revised policy must explicitly provide institutional mechanisms for offloading distressed units, reviving viable enterprises, and restoring them to productive industrial activity, thereby supporting employment generation and sustainable economic development.
FCIK stated that it has formally taken up the matter with both the Government and J&K Bank authorities, emphasizing that premature and aggressive SARFAESI actions fundamentally undermine the intent of ongoing policy reforms, rendering proposed revival and rehabilitation frameworks ineffective even before their formal implementation.
The Federation further noted that the Government has constituted a high-level committee under the chairmanship of the Finance Secretary, with the Secretary Industries and Commerce and the Executive Director, J&K Bank as members, to recommend—among other issues—a robust and credible mechanism for One-Time Settlement (OTS) of Non-Performing Assets (NPAs) and stressed accounts. The committee is yet to submit its recommendations to the Government.
As part of a constructive and forward-looking solution, FCIK proposed that the Government and the banking sector consider the creation or effective utilization of an Asset Reconstruction Company (ARC) to park NPAs. According to the Federation, such an arrangement would relieve banks and entrepreneurs alike from endless litigation, coercive proceedings, and progressive asset erosion, while enabling professional, time-bound, and value-oriented resolution of stressed accounts.
“An ARC-led framework can unlock trapped value, ease balance-sheet stress for banks, and offer entrepreneurs either a credible revival pathway or a dignified exit—rather than trapping them in a perpetual cycle of distress and uncertainty,” the Federation observed.
FCIK also expressed serious concern over the discouraging message being conveyed to the educated youth of the region. It said that the spectacle of existing entrepreneurs being subjected to relentless coercive actions, with no visible or humane exit or revival mechanisms, is actively deterring young people from venturing into entrepreneurship.
“At a time when public policy rightly promotes startups, self-employment, and industrial growth, such actions are pushing youth away from enterprise creation—ironically when industry remains the only sustainable avenue for large-scale employment and economic stability in Jammu and Kashmir,” the Federation stated.
Reiterating that it does not support willful default or avoidance of legitimate bank dues, FCIK appealed for a humane, empathetic, and calibrated approach. It specifically called for a temporary moratorium on SARFAESI actions until the Industrial Policy review process is concluded, a transparent, non-discretionary, and non-discriminatory One-Time Settlement framework—currently in the pipeline—is rolled out, and a structured and credible distress-resolution mechanism is operationalized.
“The moment calls for coordination—not confrontation—between the Government, banks, and industry,” FCIK emphasized. “A compassionate and pragmatic response today can restore confidence, protect livelihoods, and pave the way for a renewed industrial resurgence in Jammu and Kashmir.”
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