*Rescheduling of loans, concession in interest likely
Mohinder Verma
JAMMU, Sept 21: As the prevailing unrest in Kashmir valley has left adverse impact on the economic activities in several districts of both the regions, the State Government has decided to approach the Reserve Bank of India (RBI) with the request to issue directions to the banks operating in Jammu and Kashmir to announce relief measures in the form of rescheduling and restructuring of bank loans.
Highly placed sources told EXCELSIOR that a special meeting of J&K State Level Bankers Committee (J&K SLBC) was held at Srinagar under the chairmanship of Chief Secretary, B R Sharma on September 8 to discuss the issue of continued disturbances in Kashmir valley and its adverse impact on the working of banks operating in the State and seek intervention of State Government for declaring the affected districts as riot/disturbance hit so that relief package under Reserve Bank of India (RBI) guidelines can be extended to all the borrowers affected directly or indirectly in the State.
In the meeting, it was decided that as spelt out under the RBI Master Direction No RBI/FIDD/2016-17-/27 dated July 1, 2016 and in order to determine the areas/districts affected by the prevailing disturbances and the extent of damages caused to the life and property of these affected areas, the issue needs to be discussed immediately in the District Consultative Committee meetings of the respective districts to be headed by concerned Deputy Commissioners so that a coordinated action plan is evolved for formulation and implementation of the relief measures by banks in terms of RBI Master Direction.
In the SLBC meeting, all the banks operating in Jammu and Kashmir were advised to furnish district-wise/sector wise data relating to the loans and advances of banks that have been impacted by the prevailing disturbances to the concerned Lead District Managers, sources informed.
It is pertinent to mention here that Chapter VII of Master Direction of RBI deals with the applicability of the guidelines in the case of riots and disturbances. These guidelines are followed by the banks for assistance to the riot/disturbance affected persons on the advice of the RBI.
The Master Direction clearly states that District Collector (Deputy Commissioner) on occurrence of the riots/disturbances, may ask the Lead Bank Officer to convene a meeting of the District Consultative Committee and submit a report to the DCC on the extent of damage caused to life and property in the area affected by riots and disturbances. The proceedings of the District Consultative Committee or State Level Bankers Committee are forwarded to the concerned Regional Office of the Reserve Bank of India for final decision.
As per the instructions issued by the SLBC, the District Consultative Committees of 13 districts of the State-10 districts of Kashmir Division namely Srinagar, Budgam, Ganderbal, Anantnag, Kulgam, Shopian, Pulwama, Baramulla, Bandipora and Kupwara and three districts of Jammu Division namely Jammu, Samba and Kathua have recommended announcement of relief measures by the banks, sources said.
In response to a question, they said that economic activities in Jammu, Samba and Kathua districts have also suffered a lot because of prevailing unrest in Kashmir valley as these activities are interlinked with several districts of Kashmir valley.
Quoting an example, sources said, “majority of the industrial units are situated in these three districts of Jammu Division and the products produced by these units are also traded in Kashmir valley”.
“Similar is the situation vis-à-vis agriculture, horticulture and other vital activities in these districts which are also interlinked with districts of Kashmir valley”, sources said, adding “it is only after holistic view of all the aspects that Jammu, Samba and Kathua districts have been recommended for relief measures under the guidelines of Reserve Bank of India”.
They informed that the SLBC, which has received the reports from these 13 districts, will shortly approach the RBI for issuance of directions to the banks operating in Jammu and Kashmir for announcement of relief measures.
“Following decision by the RBI, the banks will announce rescheduling of all the loans in terms of Chapter IV of Master Direction of RBI”, sources said while disclosing that Chapter IV states that in all cases of restructuring, moratorium period of at least one year should be considered. Further, the banks should not insist on additional collateral security for such restructured loans. Moreover, under RBI Master Direction interest rate concession can also be extended to the borrowers.
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