SRINAGAR: J&K Bank is considering a special One-Time Settlement (OTS) scheme for stressed borrowers that could be announced alongside the Jammu and Kashmir government’s proposed Industrial Policy, Managing Director and Chief Executive Officer Amitava Chatterjee said during a meeting with representatives of the Federation of Chambers of Industries Kashmir (FCIK).
The proposed scheme emerged as a key issue during discussions between the bank’s senior management and an FCIK delegation, which raised concerns relating to stressed accounts, credit flow, revival of sick units and other issues affecting the industrial sector.
According to FCIK, Chatterjee indicated that the proposed OTS scheme was intended to provide relief to stressed borrowers, though details of the scheme have not yet been finalised.
The industry body reiterated its demand for adoption of a settlement model similar to the SBI OTS-2020 scheme for borrowers in Jammu and Kashmir and Ladakh, citing the challenges faced by businesses due to prolonged disruptions and other adverse circumstances.
During the meeting, FCIK submitted a memorandum covering issues including MSME financing, restructuring of stressed accounts, interest rates, collateral requirements, delayed receivables, government-backed credit schemes, recovery practices and banking infrastructure.
The bank’s management assured greater credit flow through schemes such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and agreed to examine cases involving higher interest rates, according to the federation.
Chatterjee also accepted an invitation to visit industrial estates and districts for direct interaction with entrepreneurs. The bank plans to organise outreach camps in collaboration with industrial bodies to assess credit requirements, explain financial products and address pending issues.
FCIK proposed the creation of a dedicated MSME Facilitation and Resolution Cell to deal with matters relating to finance, renewals, restructuring, revival and settlement of accounts. It also sought a temporary pause on recovery measures against genuine MSMEs while their cases are under examination.
The federation further called for measures including rehabilitation of viable sick units, wider implementation of the Trade Receivables Discounting System (TReDS), rationalisation of collateral requirements and increased participation of local MSMEs in the bank’s procurement process.
The meeting concluded with both sides expressing support for continued dialogue and efforts to resolve issues concerning the industrial and business sectors in Jammu and Kashmir.
