The announcement of the liquidation of the J&K State Cooperative Agriculture and Rural Development (SCARD) Bank marks a turning point in cooperative banking in Jammu and Kashmir. For decades, the institution served as a financial lifeline for farmers, rural entrepreneurs, and small borrowers who often found themselves excluded from mainstream banking channels. Its closure, though framed as a legally compliant and structured process, raises pressing questions about the future of its employees, depositors, and borrowers.
At the heart of this decision lies a dual responsibility: ensuring that the interests of depositors and borrowers are protected, while also safeguarding the livelihoods of employees who dedicated their careers to the cooperative sector. The liquidation of any financial institution is not merely a technical exercise; it is a deeply human one. Behind every account number lies a family’s savings, a farmer’s loan, or an employee’s years of service. The ripple effects of such a move extend far beyond balance sheets.
For depositors, the assurance of protection is critical. Many rural households placed their trust in SCARD Bank, often choosing it over commercial banks because of its accessibility and cooperative ethos. The completion of a comprehensive Know Your Customer verification exercise is a welcome step, ensuring that genuine depositors are identified and safeguarded. Yet, the real test will be in the execution; whether funds are returned promptly, whether borrowers are given fair treatment, and whether the transition is managed without confusion or delay.
Employees, however, face the most immediate uncertainty. With no proposal yet formulated for their rehabilitation, absorption, or compensation, they stand at a crossroads. Many of them have spent decades serving the cooperative sector, and their skills, though specialized, remain valuable. The government must move swiftly to design a humane policy framework that ensures these employees are not left adrift. Options such as absorption into other cooperative institutions, retraining for roles in agriculture and rural development departments, or financial compensation packages should be explored.
The liquidation also raises broader questions about the cooperative banking model in Jammu and Kashmir. SCARD Bank was established to provide credit support for agriculture and rural development, sectors that remain the backbone of the Union Territory’s economy. Its demise signals structural weaknesses; perhaps in governance, compliance, or financial sustainability; that must be studied carefully. If cooperative institutions are to remain relevant, they must adapt to modern regulatory standards, embrace technology, and maintain strict financial discipline.
For borrowers, particularly farmers and rural entrepreneurs, the closure of SCARD Bank could mean disruption in access to credit. While commercial banks and microfinance institutions exist, they often lack the grassroots presence and flexibility that cooperatives provide. The government must ensure that alternative credit channels are strengthened.
The present situation demands empathy and foresight. Liquidation may be a legal necessity, but it must not become a social injustice. The cooperative sector has historically played a vital role in empowering rural populations, and its institutions must be treated not merely as financial entities but as instruments of social development.
Ultimately, the liquidation of SCARD Bank is a reminder that institutions, no matter how established, are only as strong as their governance and adaptability. It is also a reminder that decisions in the financial sector carry profound social consequences. As Jammu and Kashmir moves forward, the challenge will be to ensure that depositors are protected, employees are rehabilitated, and rural borrowers continue to have access to credit. Only then can this difficult transition be transformed into an opportunity for reform, resilience, and renewal in the cooperative banking system.