KCCI seeks OTS relief, halt to recovery notices for stressed borrowers

Srinagar, September 19: The Kashmir Chamber of Commerce and Industry (KCC&I) has urged Jammu & Kashmir Bank to introduce a transparent, formula-based Special One-Time Settlement (OTS) scheme for genuinely stressed borrowers and keep recovery notices against eligible applicants in abeyance until the scheme is announced.

The demand was raised during a meeting between a KCC&I delegation, led by President Javid Ahmad Tenga, and J&K Bank Managing Director and CEO Amitava Chatterjee. The Chamber submitted an 11-page memorandum covering regional credit deployment, interest rates, recruitment, governance, lending procedures and recovery measures.

The delegation comprised KCC&I Past President A.M. Mattoo, Vice President Farooq Amin and Ashiq Hussain Shangloo.

Special OTS for stressed borrowers

KCC&I said more than two years had passed since discussions on a Special OTS scheme began with the bank, but borrowers whose accounts had turned non-performing assets (NPAs) were still awaiting a concrete, time-bound announcement.

The Chamber sought an SBI-type settlement mechanism with clear eligibility criteria, reasonable timelines and revival-oriented provisions for genuinely stressed borrowers.

It clarified that the demand was not for a blanket loan waiver, but for a structured mechanism enabling eligible borrowers to settle their accounts and exit prolonged litigation and recovery proceedings.

KCC&I attributed the financial difficulties faced by businesses in Jammu & Kashmir to prolonged disruptions, including curfews, shutdowns, violence, communication restrictions, the 2014 floods, the 2016 unrest, the 2019 constitutional changes and the COVID-19 pandemic.

The Chamber also sought a temporary pause on coercive recovery measures for prima facie eligible applicants while their cases are considered under the proposed scheme.

KCCI seeks halt to recovery notices

The Chamber raised concerns over the frequent publication of recovery notices against borrowers in newspapers, saying the practice was causing serious social and reputational difficulties for affected entrepreneurs and their families.

According to KCC&I, repeated publication of such notices could cause social embarrassment and further damage the standing of otherwise genuine borrowers within the business community.

It urged J&K Bank to keep recovery notices and other coercive recovery measures in abeyance for a reasonable period in cases involving genuine and viable MSMEs facing temporary financial stress.

More specifically, the Chamber sought that recovery notices against such borrowers remain suspended until a comprehensive OTS scheme is announced.

Credit deployment, interest rates and lending procedures

KCC&I acknowledged J&K Bank’s recent financial performance, including its reported record net profit of Rs 2,363.47 crore in financial year 2025–26. However, it said its concerns centred on the pace and pattern of credit growth and the need to ensure adequate attention to the regional economy.

The Chamber demanded that the bank increase its Credit-Deposit (CD) Ratio to bring it at par with the national level, arguing that this would support greater deployment of deposits mobilised in Jammu & Kashmir towards productive lending and local economic activity.

On interest rates, KCC&I claimed that advances extended outside Jammu & Kashmir were being offered at lower rates than comparable advances within the region. It also said other public-sector and private-sector banks operating in the region were offering credit facilities at lower rates than J&K Bank.

The Chamber sought greater transparency and parity in interest-rate benchmarking across geographies.

It further urged the bank to:

• Expedite the sanction and renewal of working-capital and cash-credit limits, particularly for MSMEs and small businesses.

• Develop lending products aligned with the seasonal cash flows of tourism, hospitality, horticulture, handicrafts, transport and trade.

• Increase the use of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to facilitate collateral-free lending to eligible MSMEs.

• Adopt proportionate collateral and guarantee requirements.

• Ensure prior disclosure and greater transparency in processing, maintenance and other banking charges.

Net-worth certificates for credit-limit renewals

KCC&I raised objections to the requirement of net-worth certificates for the renewal of cash-credit and other credit limits, saying it added to the compliance burden on businesses and was not commonly applied by other banks.

During the interaction, Managing Director and CEO Amitava Chatterjee assured the delegation that directions would be issued so that borrowers would not be asked to furnish net-worth certificates for renewal of their credit limits.

Recruitment and governance concerns

The Chamber sought dedicated representation for the Kashmir business community on the J&K Bank Board, stating that regional economic perspectives should be adequately reflected in the bank’s governance and stakeholder engagement.

On recruitment, KCC&I referred to the proposed recruitment of around 1,400 posts and urged the bank to structure the recruitment drive, as well as future recruitments, on a divisional basis, with equal allocation between Jammu and Kashmir provinces.

The Chamber said the proposal was aimed at ensuring balanced regional representation in the bank’s recruitment process.

Memorandum submitted to bank management

KCC&I said the memorandum presented a comprehensive set of concerns and recommendations relating to the bank’s lending policies, regional credit deployment, governance, recruitment and recovery practices.

The Chamber maintained that a transparent and revival-oriented approach towards stressed borrowers, alongside improved access to credit, would support the sustainability of businesses and contribute to economic activity in Jammu & Kashmir.