Excelsior Correspondent
SRINAGAR, Aug 8: The Federation of Chambers of Industries Kashmir (FCIK) today questioned the actions of J&K Bank, inquiring why the bank is opting for property seizures instead of exploring alternative solutions such as debt restructuring for individuals whose accounts have been downgraded and categorized as Non-Performing Assets (NPAs).
In a statement released here, FCIK expressed its concerns over the recent actions of J&K Bank. The Federation criticized the bank for seizing an industrial unit at IGC Lassipora merely two months after downgrading the enterprise’s account, terming it a “disturbing trend of intimidation against entrepreneurs.”
FCIK also highlighted a similar incident in Srinagar where the bank seized a residential property belonging to an individual within just five months of downgrading their account.
Describing a specific case, FCIK stated, “J&K Bank officials forcibly took possession of an industrial unit named M/s Mehfooz Agro Products at Industrial Growth Centre Lassipora on Tuesday. The unit was established in 2017 by a highly educated young individual who had excelled in the MCA examination, and it is engaged in processing and exporting walnut/almond kernels. Unfortunately, the unit faced severe setbacks during the COVID-19 pandemic.”
“The treatment of such nature is regrettable… and has the potential to shatter the faith and confidence of prospective entrepreneurs not only in lending institutions but also in the government policies and schemes…,” the statement added.
The industry body raised several critical questions, including why the bank initially denied credit to the entrepreneur under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, designed by the Government of India to provide collateral-free credit to entrepreneurs up to 5 Crores.
FCIK further questioned why the bank chose to seize the entrepreneur’s property, valued at more than three times the total outstanding debt, instead of considering other options such as debt restructuring.
Expressing dismay over the attachment of collateral properties within just 60 days of account downgrading, FCIK demanded transparency from J&K Bank and questioned whether this trend would become the new norm.
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