‘Industrial unit seized within two months of downgrading of account’
Srinagar: The Federation of Chambers of Industries Kashmir (FCIK) has regretted the action of J&K Bank to seize an industrial unit at IGC Lassipora on Tuesday within just two months of downgrading of account of the enterprise, terming it a “new low hit by the bank in intimidation of entrepreneurs”. Earlier the bank had seized a residential house in Srinagar within five months of downgrading of the account of concerned entrepreneur.
In a statement issued here, the FCIK informed, “J&K Bank officials forcibly took possession of an industrial unit M/s Mehfooz Agro Products at Industrial Growth Centre Lassipora on Tuesday which has been set up in 2017 by a highly educated young person who had topped in MCA examination. The said unit is engaged in processing and export of walnut/almond kernels that had unfortunately received a severe setback during COVID-19. Despite this, the entrepreneur was regular in servicing his cash-credit facility of 69.50 lakhs and paying installments towards Guaranteed Emergency Credit Line (GECL) of 14 lakhs sanctioned in his favour under a scheme approved by GOI to combat the crises caused by pandemic and guaranteed by GOI.”
According to the promoter of the unit Shahid Gulzar, he had already paid back 7 lakhs out of 14 lakhs of GECL and had also paid 50 thousand rupees during the month of May itself when his account was downgraded at the end of the month. “Although the bank had demanded a payment of Rs 42000 more, yet he could not arrange and make for the reason that he was completely busy in the hospital with her ailing young wife who suffered from terminal illness which was well in the knowledge of bank officials, explained the promoter,” the statement said.
The FCIK has regretted the “harsh treatment” by the bank to this young highly educated entrepreneur which has the potential to shatter the faith and confidence of prospective entrepreneurs not only on the lending institutions but also on the government policies and schemes aimed to allure young minds towards entrepreneurship. “It was beyond our comprehension to guess why the bank in the first instance had denied credit to this entrepreneur under the existing scheme of Credit Guarantee fund Trust for Micro and Small Enterprises (CGTMSE) which has been devised by GOI for such entrepreneurs and assured of collateral-free credit to them up to Rs 5 crores,” the FCIK asked. “The question also aroused as to why the bank instead of exploring other options including restructuring of the debt of the entrepreneur opted for seizing his property when that property valued at more than 3 times of the total outstanding.”
While conveying its dismay on attachment of properties kept as collateral security within 60 days of downgrading of accounts, the FCIK has asked J&K Bank to come clean on whether it would be their new normal now.
The FCIK wishes to put an end to the growing confrontation between enterprises and the bank and has reiterated its demand for government intervention at the earliest. The matter also needed to be looked into by the government in the context of the massive industrialization programme launched by GOI and the UT government for engagement of youth in entrepreneurship, it said.
The FCIK has called for a meeting of presidents of valley-based industrial associations to deliberate upon the issue on Wednesday. The industrial association of Lassipora is also scheduled to discuss this grave issue on Wednesday.