Mubashir Aalam Wani
Srinagar, May 27: Valley’s trade bodies have called for abolishing J&K Bank’s One Time Settlement (OTS) scheme for the Non-Performing Assets (NPA) account holders, saying a majority of the people could not avail of the facility due to “categorisation”.
Jammu & Kashmir Bank first introduced the Special One Time Settlement Scheme (SOTS) in 2021. However, only a selected group of NPA accounts were falling under the scheme as per the categorisation policy.
Then, the One-Time Settlement (OTS) scheme was re-introduced in 2022 as ‘JKB Special Karz Mukti Scheme – 2022’ under which, for making the full payment within one month from the date of sanction, the beneficiary of the scheme was eligible to avail of an incentive of 5 percent of the amount arrived at as per the settlement formula while as those paying within two months were also eligible to avail 2 percent of the OTS amount as an incentive.
As per the scheme, the accounts classified as Doubtful 3 (NPA for 4 years and above) and Loss assets with outstanding amounts below Rs 15 lakhs as on 31 March 2022 were eligible for settlement.
Traders, businessmen, entrepreneurs and industrialists said that there should have been no classification but a general amnesty to all on similar lines.
“The announcement of the OTS scheme by J&K Bank was a respite for me, but despite wishing to clear my liabilities, I could not, just because of the eligibility criteria set by the bank. My friend with the same amount liquidated his liabilities with the same bank,” said an account holder.
The president of the valley’s apex trade body, Kashmir Chamber of Commerce and Industry (KCC&I), Javid Tenga, said that they have already taken up the issue of the abolishment of categorization of NPA accounts with the MD of the J&K bank earlier in March this year.
“In the recent two meetings with the J&K Bank authorities, we raised the issue of categorisation of earlier announced OTS schemes due to which many NPA account holders could not avail of the scheme. We are hopeful of a new OTS scheme which will be an amnesty in general for all with extended time and with no riders,” he said.
President Federation Chamber of Commerce and Industries (FCIK) Shahid Kamli said that despite the J&K Bank introducing the OTS scheme twice, the majority of such NPA account holders could not avail of the scheme due to the categorization. If someone wants to clear his liabilities with the bank why the account holder has to be under a specific category, he asked.
“Although the OTS scheme was launched by the J&K bank for NPA accounts, there are around 80 percent of such account holders who could avail the facility due to the categorisation but are willing to liquidate their banking liabilities,” Kamli said.
The FCIK president said that the rider on the OTS scheme by the J&K Bank has made a huge number of NPA accounts ineligible to apply for the scheme. “Many such aspiring account holders are ready to liquidate their banking liabilities,” he said, adding, “The classification of NPA accounts as D1, D2, and D3 must be abolished and there should be a generalized amnesty with more waiver percentages than earlier editions of OTS.”
Kashmir Economic Alliance (KEA) chairman Mohammad Yassen Khan said the OTS scheme by J&K Bank was introduced with fanfare but that only a selected group of accounts were falling under that, stating that there was no respite for others.
“No doubt the OTS scheme was offered, but the fact is the majority of the businessmen and traders could not avail of the scheme just because of categorization and conditions. We have already apprised the banking authorities of the issue and we are hopeful of its redressal as there are many such account holders who want to make the settlement with the banks,” he said.
Citing the financial inability and poor business, Khan said he has been highlighting the downward business trends. “Our business is declining, liabilities are piling while assets are draining, and in these situations, if one wants to clear the outstanding with banks, such an OTS scheme should be introduced which will offer a waiver percentage earlier and should cover all,” he said.
