Relief for stressed businesses: J&K Bank weighs special OTS scheme, says FCIK

SRINAGAR: Jammu & Kashmir Bank is contemplating a lucrative Special One-Time Settlement (OTS) scheme for stressed borrowers, which may be unveiled alongside the upcoming J&K Industrial Policy, according to Bank Managing Director and CEO Amitava Chatterjee.

The announcement came reportedly during a marathon meeting between the Bank’s senior management and a delegation from the Federation of Chambers of Industries Kashmir (FCIK). While Chatterjee did not disclose the precise contours of the proposed scheme, he indicated that it is intended to provide closure to stressed accounts.

Bank Commitments and Outreach

During the session, Chatterjee addressed an array of operational issues, committing to expand credit flow through government-backed schemes such as CGTMSE and agreeing to examine reported interest rate anomalies.

To resolve pending matters and present financial offerings directly to entrepreneurs, J&K Bank will hold joint outreach camps with industrial associations across various districts and industrial estates. Chatterjee noted that these interactions aim to address local credit needs dynamically.

Demands Put Forward by FCIK

In a statement issued following the meeting, the FCIK outlined its stance on the financial distress facing local enterprises and presented a comprehensive memorandum to the Bank management.

Statement by the Federation of Chambers of Industries Kashmir (FCIK):

• On Legacy Debt and OTS: The Federation called for the direct replication of the SBI OTS-2020 scheme without dilution, exclusively for borrowers in J&K and Ladakh. It stated that local businesses have accumulated legacy debt due to unique regional challenges, including over three decades of turmoil, frequent disruptions, and natural calamities.

• On Recovery and Restructuring: The association requested a dedicated MSME Facilitation and Resolution Cell headed by a CGM or Executive Director to handle pending restructuring, revival, and settlement cases. It urged a temporary pause on coercive recovery measures against genuine MSMEs, clarifying that such protection should explicitly exclude cases of fraud, wilful default, or fund diversion.

• On Competition and Local Credit: FCIK stated that outreach camps are critical as competing financial institutions are aggressively offering lower rates and loan-takeover options in industrial zones. The body expressed willingness to help J&K Bank retain its customer base provided competitive services are offered, while emphasizing the need for balanced credit distribution across all sub-regions.

• On Governance: The statement affirmed that J&K Bank must remain completely insulated from political interests, operating strictly as a professionally managed commercial and developmental institution focused on regional economic growth.

The meeting concluded with both sides agreeing to maintain institutional dialogue, with the Bank taking steps to address legitimate business concerns while strengthening priority-sector lending.