Srinagar: In a setback to the loanees of Kashmir valley, who could not recycle their accounts due to the unrest, The Reserve Bank of India has rejected the proposal for restructuring of stressed loans, sent by State Level Bankers Committee.
Top sources told KNS that the communication was sent to Jammu and Kashmir government on 15 November 2016, by Reserve Bank of India, indicating that the executive magistrate or the State government has to confirm the place where the riots and disturbance have taken place.
Sources further reveal that due to defect in the recommendations from the state level bankers committee, even the relaxation in Equated Monthly Installments (EMIs) have not been taken up for consideration.
With this RBI decision, the experts opined that the state government should have done home work and fulfilled the formalities required for restructured of stressed loans.
One of the economic has opined that the state level bankers committee has causally forwarded the recommendations which were not found as per the required parameters. “The state government should have taken a call on the issue and should have certified that the disturbances have prevailed in the valley for last four months, which resulted in the stress on loan accounts maintained in the banks,” he said wished not to be named.
KNS had already reported on November 11, in its bulletin that the restructuring of the stressed loans may not be considered.
It is to mention here that the top sources had told KNS that all the banks in Jammu & Kashmir are governed by the Reserve Bank of India (RBI) rulings, and there is no such provision for restructuring of such stressed loans under these conditions. “Though there is no provision of such type, but yes the State government can only ask the State Level Bankers Committee (SLBC) to request Reserve Bank of India (RBI) for relaxing the schedule of EMI’s” Sources had told KNS.
CEO and Chairman J&K Bank, Parvez Ahmad, had also confirmed to KNS that the restructuring of the stressed loan has been taken up with the concerned quarter. “I clarify that restructuring does not mean waiving of the loan amount but issue regarding rescheduling of EMIs with moratorium period shall be looked into,” he had said.
The Bank Chairman had added that rescheduling of EMIs shall be done under the specific directions of the Reserve bank of India (RBI).
Sources had told KNS that before recommending the same, the state government has to evaluate whether the present situation in valley demands consideration of the same.
Sources had also maintained that the Central Government on complete restructuring of stressed loans can take the call after the union cabinet takes a Suo-motu decision for waiving of interest, complete restructuring of loans and operations of non operative accounts in the state.
One of the stake holders had also expressed his view to KNS that the state government should rise to the occasion, should approach RBI and Central government with its strong recommendation on the complete restructuring of stressed loans so that a relief is brought out. “The borrowers who are facing the brunt of ongoing unrest are in a state of panic as to how the repayments and Equated Monthly Installments (EMIs) would be paid as the entire business establishments have faced shutdown and no transactions could be carried,” he had said wished not to be named.
As per a rough estimate, the business community in the Kashmir valley has faced a loss of 2, 0000 thousand crores which directly has left the business community in a state of bother as to, how their future business would be excelled.
It is to mention here that the Jammu and Kashmir Bank who is the front runner of financial institutions of Jammu and Kashmir is facing huge liability of Non performing accounts (NPAs) within and outside the state as per the balance sheet brought into the public domain in the recent past. (KNS)
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