November 2016 News

Govt's Failure To Declare Kashmir 'disturbed' Delays Restructuring Of Loans

18 November 2016
Greater Kashmir
Mukeet Akmali

Srinagar: Failure of PDP-BJP government to respond to the communication from Reserve Bank of India seeking its opinion about declaring Kashmir as 'riot-disturbance affected' in view of ongoing unrest has resulted in RBI turning down plea of State Level Bankers Committee for rescheduling-restructuring of loan accounts, officials informed. Sources informed Greater Kashmir that the procedure for seeking restructuring or rescheduling of loan accounts in places where there have been any disturbances is a simple process where SLBC approaches RBI. 'Government is not ready to declare Valley as affected as was the opinion sought by the RBI, the reason behind is that it would give legitimacy to the unrest and then business community would seek compensation from the state government,' official sources said adding that 'otherwise declaring any area as riot affected doesn't even need consent of the government but district magistrate can declare it at his level and convey it to the SLBC as per the RBI's Master Directions.' Finance experts and business leaders opine that FM's assertion of 'taking up issue at appropriate time' clearly indicates that state government would approach Union Finance Ministry rather than 'declaring Kashmir as affected in order to score political gains out of it.' They point out that RBI's Master Directions otherwise don't require state government to approach anybody rather they have to declare Kashmir as riot affected which would automatically allow banks to restructure-reschedule accounts. As per Chapter V11 of RBI's Master Directions 2016- 'Applicability of the guidelines in the case of riots and disturbances-' reads: 'With a view to ensuring quick relief to the affected persons, it has been decided that the District Collector, on occurrence of the riots- disturbances, may ask the Lead Bank Officer to convene a meeting of the DCC, if necessary and submit a report to the DCC on the extent of damage caused to life and property in the area affected by riots-disturbances.' 'If the DCC is satisfied that there has been extensive loss to life and property on account of the riots- disturbances, the relief as per the above guidelines may be extended to the people affected by the riots- disturbances.' Chairman of Jammu and Kashmir Bank and Convener of SLBC, Parvez Ahmad, had pursued RBI to allow restructuring of loans on account of losses incurred by Kashmir economy. However on November 15, RBI wrote, 'In terms of our Master Directions on Natural Calamities 2016 dated July 01, 2016, only genuine persons duly identified by the state administration as having been affected by the riots-disturbances are provided assistance.' 'In light of our circular, it is imperative that the areas-people affected are identified to consider for the special dispensation. As the district collector- state government has not yet declared any area as affected by riots or disturbances, the special dispensation required by J&K Bank (SLBC convenor, J&K State) does not fall under our circular', the RBI communicated. Financial experts and business leaders have criticized the move of state government to approach Union finance Ministry for restructuring of loans. 'They (government) doesn't want to give legitimacy to the unrest, that may be the reason why they haven't declare Kashmir as riot affected in order to make it qualify under RBI's Master Directions to allow banks to restructure loans,' said noted economist Prof Nisar Ali. Industrialist and former president of FCIK, ShakeelQalander said: 'Government is liable to pay for interests for the period they imposed curfew and restrictions,' he said adding 'for three months Kashmir remained under curfew which makes government liable to pay penalty to the business community for losses.' President Kashmir Chamber of Commerce and Industries (KCCI), Mushtaq Ahmad Wani said: 'Onus lies on government to pay interest for the period they didn't allow businesses to operate. Business community is in distress and there is immediate need to restructure loans in order to ensure cash liquidity in the markets.'