KCCI Pushes for Unrestricted ‘Karz-se-Mukti’ Scheme to Aid Borrowers
Srinagar, January 1: The Kashmir Chamber of Commerce and Industry (KCCI) has called on Jammu & Kashmir Bank to eliminate all monetary caps and ceilings from its recently announced special one-time settlement scheme, named “Karz-se-Mukti.” According to the Chamber, the scheme must operate without any upper limits to effectively address the diverse needs of borrowers across all segments of the business community.
The existing scheme includes a ceiling of ₹5 crore, which the Chamber identifies as a significant impediment to its effectiveness. KCCI asserts that such arbitrary caps restrict the scheme’s ability to provide meaningful relief to larger borrowers who equally require assistance. This limitation, coupled with the restrictive three-month time frame, deviates from the comprehensive relief measures discussed with Lieutenant Governor Manoj Sinha and Chief Minister Omar Abdullah.
In a detailed review of the scheme, the Chamber highlighted several critical areas requiring immediate modification. Of particular concern is the scheme’s stance on cases where recovery suits have not been filed, which are currently excluded from eligibility. KCCI argues that this exclusion creates an unwarranted distinction among borrowers and should be reconsidered.
KCCI also raised concerns about the treatment of collateral in the current scheme. Many borrowers have offered their homes and other properties as collateral in good faith, yet the scheme imposes higher payment demands on these cases despite the presence of sufficient collateral. This approach, according to the Chamber, penalizes borrowers who have demonstrated commitment by providing substantial security.
Regarding pending cases, KCCI notes that RBI guidelines permit their inclusion in one-time settlement schemes with Board approval. Given that the special OTS scheme itself has received Board approval, the Chamber advocates for the inclusion of these cases, while maintaining that any ongoing proceedings should continue as required by law.
The Chamber further emphasizes the importance of including cases currently under investigation where no adverse orders have been issued. KCCI’s position is that the bank can take a commercial approach to these cases while safeguarding public money, with the provision that investigating agencies be informed upon OTS sanction.
On the temporal aspect, the Chamber strongly recommends extending the scheme’s duration to a minimum of one year, with provisions for minimal interest charges on repayments extending beyond three months. KCCI advocates for a more flexible approach to determining relief, based on factors such as account ageing and bank comfort, without rigid security requirements.
KCCI appeals to Lieutenant Governor Shri Manoj Sinha, Chief Minister Mr. Omar Abdullah, Chief Secretary Mr. Atal Duloo, and CEO & MD of J&K Bank Mr. Amitava Chatterjee to reconsider this scheme in a way that ensures account holders become eligible to avail this scheme while simultaneously helping J&K Bank improve its NPA ratio.
Press Release
The Kashmir Chamber of Commerce and Industry (KCCI) has called upon Jammu & Kashmir Bank to remove all monetary caps and ceilings from its recently announced special one-time settlement scheme, known as “Karz-se-Mukti.”
The Chamber stressed that the scheme must operate without any upper limits to effectively address the diverse needs of borrowers across all segments of the business community..
The existing scheme’s ceiling of Rs 5 crore has been identified as a major impediment to its effectiveness. The Chamber maintains that such arbitrary caps fundamentally restrict the scheme’s ability to provide meaningful relief to larger borrowers who equally require assistance. This limitation, along with the restrictive three-month time frame, represents a significant departure from the comprehensive relief measures discussed with Lieutenant Governor Manoj Sinha and Chief Minister Omar Abdullah.
In its detailed review of the scheme, the Chamber has identified several critical areas requiring immediate modification. Of particular concern is the scheme’s stance on cases where recovery suits have not been filed, which are currently excluded from eligibility. The Chamber argues that this exclusion creates an unwarranted distinction among borrowers and should be reconsidered.
The Chamber also raises concerns about the treatment of collateral in the current scheme. Many borrowers have offered their homes and other properties as collateral in good faith, yet the scheme imposes higher payment demands on these cases despite the presence of sufficient collateral. This approach, according to the Chamber, penalizes borrowers who have demonstrated commitment by providing substantial security.
Regarding pending cases, the Chamber notes that RBI guidelines permit their inclusion in one-time settlement schemes with Board approval. Given that the special OTS scheme itself has received Board approval, the Chamber advocates for the inclusion of these cases, while maintaining that any ongoing proceedings should continue as required by law.
The Chamber further emphasizes the importance of including cases currently under investigation where no adverse orders have been issued. Their position is that the bank can take a commercial approach to these cases while safeguarding public money, with the provision that investigating agencies be informed upon OTS sanction.
On the temporal aspect, the Chamber strongly recommends extending the scheme’s duration to a minimum of one year, with provisions for minimal interest charges on repayments extending beyond three months. The KCCI advocates for a more flexible approach to determining relief, based on factors such as account ageing and bank comfort, without rigid security requirements.
The modifications we propose are essential for creating a truly effective one-time settlement scheme.
KCCI appeals LG Shri Manoj Sinha, Chief Minister, Mr Omar Abdullah, Chief Secretary, Mr. Atal Duloo, CEO, MD J&K Bank Mr. Amitava Chatterjee to reconsider this scheme in a way so that the account holders become eligible to avail this scheme and at the same time J&K Bank bank to further improve its NPA ratio.
The Kashmir Chamber of Commerce & Industry INC.
2ND FLOOR, MOHIDIN TRUST BUILDING,
RESIDENCY ROAD, SRINAGAR-KASHMIR-190001
TEL: 0194-2455446/2482176
FAX : 0194: 2452517
E-MAIL : thekashmirchamber@gmail.com
Website : www.thekcci.in
