Srinagar, Aug 7: With the release of a video showing a Dalgate businessman’s family being evicted from their home after failing to repay a bank loan on time, the Kashmir business community has asked the J&K government to intervene in resolving the issue of Non-performing Assets (NPAs).
Reserve Bank of India defines Non-Performing Assets in India as any advance or loan that is overdue for more than 90 days.
“An asset becomes non-performing when it ceases to generate income for the bank,” said RBI in a circular form 2007.
To be more attuned to international practises, RBI implemented the 90 days overdue norm for identifying NPAs has been made applicable from the year ended March 31, 2004. Depending on how long the assets have been an NPA, there are different types of non-performing assets as well.
President Kashmir Chamber of Commerce and Industry, Javid Tenga said that he took up the issue of NPAs with Lieutenant Governor Manoj Sinha and Chairman of J&K Bank Baldev Prakash recently.
“I discussed the matter of the recently announced OTS Scheme announced by J&K Bank and sought his intervention in resolving the matter of NPA’s with the J&K Bank,” he said.
Tenga also had a meeting with the MD/CEO of J&K Bank Baldev Prakash and requested him to suspend action against the stressed borrowers and provide them with appropriate time to straighten their accounts.
He also impressed upon him the need to announce a new OTS Scheme with a longer duration for settlement with a higher limit than the previous Scheme. He informed the J&K Bank MD that Bank action against borrowers had shocked the business community at large.
The Federation of Chambers of Industries Kashmir (FCIK) has sought immediate intervention from the government of Jammu and Kashmir in resolving the issue of Non-Performing Assets (NPAs) and stressful accounts in order to put an end to the growing confrontation between J&K Bank and the business community.
Kashmir’s apex industrial chamber has “regretted the harsh recovery process let loose by J&K Bank despite clear instructions from Union Ministry of Finance to deal with the issue with utter sensitivity and humane approach.”
“The harassment, intimidation and physical dispossession of inmates from their residential houses in the name of standard operational procedures (SOPs) is just not acceptable to the business community and the society of Jammu and Kashmir which has been instrumental in the growth of J&K Bank to its current position.”
“While expressing anguish over recent bank action against a borrower, whose account was reportedly downgraded just five months back, FCIK said that such an action was fraught with severe consequences on the relations and mutual trust of entrepreneurs with the bank. The brewing anger expressed by masses on social media over the forcible eviction of a 95-year-old lady from her residential house, in the instant case, should be read by the bank authorities as writing on the wall.” “The action has also caused shockwaves across the entrepreneurial community with prospective entrepreneurs seriously thinking of abandoning their plans to adopt entrepreneurship as their means of livelihood. If the bank justified the attachment of collateral security within 6 months of the failure of an entrepreneur to serve interest for any reason, then why has there been leniency in the recovery of loans from outside businessmen against whom there is a whopping outstanding amount of Rs 6044.03 crore as NPA, as officially declared on June 30,” questioned FCIK in a statement adding that in some of the cases, money of J&K Bank is pending recovery for a decade or so. While the amount in NPA with outside enterprises accounted for 58% of total deposits made by people from outside J&K, the total NPA balance of Rs 3412.10 crore against the borrowers of J&K accounted for just 3% deposited by the people of J&K with the bank.
