Chamber decries ‘intimidation tactics, exploitation of borrowers’, seeks govt intervention
SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) on Friday said it will initiate a robust protest campaign across the Kashmir Valley, to address the alleged harassment and intimidation tactics employed by J&K Bank against Micro, Small and Medium Enterprises (MSMEs) and other borrowers.
This initiative comes in response to growing frustrations among industry leaders regarding the difficulties faced by borrowers who are struggling to meet their debt obligations due to unavoidable circumstances, the FCIK said in a statement issued here.
Following extensive discussions involving presidents and representatives from organized industrial estates and various sectors, the decision to protest stems from the bank’s relentless issuance of SARFAESI notices, possession notices and e-auction notices, along with attempts to secure eviction orders from courts, the Chamber said, adding that many affected borrowers are facing the threat of being forcibly removed from their business premises and mortgaged properties, often their homes.
The planned protest activities aim to expose the bank’s exploitative practices, including peaceful sit-in protests at industrial estates and district headquarters, press conferences, and appeals to both local and union governments, as well as the Reserve Bank of India for intervention.
Industry leaders expressed serious concerns about the classification of MSME accounts as Non-Performing Assets (NPAs) due to missed payments, without considering the broader reasons such as delayed customer payments and external factors that hinder compliance. They criticized J&K Bank for disregarding the unique challenges faced by businesses in Kashmir, particularly during crises like the 2014 floods, when the bank failed to offer any interest concessions despite its own operational disruptions.
The leaders, according to the statement, highlighted the bank’s practice of charging interest rates 4% to 5% higher than those in other states, citing a volatile law and order situation as justification. They condemned the bank’s regular demands for excessive collateral and guarantees, practices seen as exploitative and contradictory to regulatory standards.
Participants voiced alarm over the stark contrast between the treatment of local borrowers, who are required to secure loans with collateral, and the bank’s willingness to provide substantial, collateral-free loans to external entities, a trend reminiscent of past financial misjudgments that resulted in significant losses.
The sluggish pace of J&K Bank in processing loans under various Government of India collateral-free schemes was also a point of concern, which prompted apprehension about the effectiveness of both government and regulatory bodies in ensuring these programs are adequately implemented, the statement said.
The FCIK Advisory Committee has vowed to take a leadership role in the protest, pledging to relentlessly pursue resolution for the NPA issue. They have committed to engaging with the Deputy Chief Minister to seek immediate government action on behalf of the business community.