Collateral Seizures and Loan Recovery Tactics Spar Tensions: J&K Industries Seek Chief Secretary’s Help

Collateral Seizures and Loan Recovery Tactics Spar Tensions: J&K Industries Seek Chief Secretary's Help

The Federation of Chambers of Industries Kashmir (FCIK) has urgently requested Chief Secretary Atal Duloo’s intervention, stating, “We seek to curb the perceived oppressive and draconian measures taken by Jammu and Kashmir Bank authorities against defaulting businesses, including MSMEs, and restore the trust and confidence of the business community.”

In strong condemnation, FCIK voiced their disapproval, stating, “We condemn the decision of the Bank authorities to employ third-party agents for loan recovery and the seizure of property provided as collateral by business enterprises. Such actions may lead to potential misunderstandings and hurt the industrialisation programme.”

In a communication to Chief Secretary Atal Duloo, FCIK emphasised the need for collaborative efforts to address the challenges faced by the distressed business community.

“A resolution to the issue of stressed and non-performing accounts must be prioritized through deliberations involving bank authorities, the UT government, and stakeholders. Until then, we call for the restraint of the Bank from further actions against defaulting units,” they said.

The Chief Secretary was apprised of a concerning incident, with FCIK saying, “An agent of J&K Bank from Mohali, Punjab, sealed an industrial unit, M/s Pureweave Designs Private Limited, at Rangreth industrial complex and the associated office complex in Nawpora, Srinagar. The agent, M/s GATS Reconstruction Company Mohali, is contemplating taking possession of additional properties, including the entrepreneur’s residential house.”

“Such actions send wrong signals and create anxiety within the business community. The incident has sparked a fresh debate on the dispossession of assets belonging to the business community. Entrepreneurs are uncertain whether the Bank sought prior consent for these measures from the UT government, acting as the majority shareholders of the Bank,” FCIK added.

Highlighting past occurrences, FCIK said, “The symbolic possession of M/s Mehfooz Agro Industries in Lassipora and the eviction of a 96-year-old lady from her residence occurred shortly after the accounts turned non-performing. The Bank’s actions, including repressive measures, intimidation, and public defamation of entrepreneurs over the past two years, were equally condemned by the people and business chambers.”

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