Huge accumulating stressed loans in Kashmir, unlikely to restructured

  • State, Published on: Friday 11th November 16 - 8:32pm

No stressed loans to be waived off, rescheduling of EMI’s to be looked into: JKB Chairman

Srinagar: As the huge number of accounts with the banks in Kashmir have not been recycled during the unrest, and have gone tremendously under stress, the sources revealed to Global Kashmir on Friday that restructuring by any government Agency or Financial Institutions may not be considered, but it may entail relaxation in Equated Monthly Installments (EMIs).
Top sources said 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 told Global Kashmir.
CEO and Chairman J&K Bank, Parvez Ahmad, 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 said.
The Bank Chairman added that rescheduling of EMIs shall be done under the specific directions of the Reserve bank of India (RBI).
Sources said that before recommending the same, the state government has to evaluate whether the present situation in valley demands consideration of the same.
Sources 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.
Sources added that RBI even after if any such instructions received in this behalf from Union Cabinet has to see the impact of such cabinet decision in totality.
One of the stake holders expressed his view told Global Kashmir 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 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.
Another expert who had served as top officials in finance department opined that it would be very difficult for financial institutions to consider demand of restructuring, which covers reduction in the rate of interest and also waving of certain amount of loans. “See by doing so, these financial institutions and the government have to digest huge financial burden and then there after the same demand may crop up from eastern part of India and other states facing such disturbances,” the former official said.
However he stated that such restructuring merits consideration for restoring of stressed loans. “This would help the business establishments to revive again,” he said and added that the restructuring should not be considered for all such accounts were willful default and NPA’s have taken place.
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.