13th February 2009
Srinagar
J&K Bank infuses relief, rehabilitation & revival dose to J&K economy:<br>Chief Minister unveils Bank's Industrial & Economic Revival Package
As a part of its strategic focus on J&K State and to provide stimulus to the industry in the state, J&K Bank has announced a massive relief package for different customer segments across the state. The package for economic and business revival in the State formulated by the state owned bank and largest financial institution of the State was unveiled by the Chief Minister, Mr. Omar Abdullah, today at Jammu. The Chief Minister appreciated the proactive and timely intervention by the bank which he said will keep the growth momentum in the state.
The package comes in the wake of the repeated rounds of civil unrest and associated violence in the recent that has plagued the state along with global recession that have caused serious concerns about the stability of the J&K economy. While giving background of the J&K Bank sectoral initiatives containing massive relief, revival and rehabilitation package for its customers in J&K, Dr. Haseeb A Drabu, Chairman and Chief Executive of the Bank said, The overall macro-economic framework has being structurally impaired and well-established business networks have been disrupted, entrepreneurs, traders, horticulturists and transporters, indeed all the segments of business, have been impacted. Not only has the State investment climate been adversely affected, the business environment has also deteriorated rapidly."
"While facing a full blown economic depression, that there is need for pro-active management of the economy. The regressive trends in the economy need to be addressed through a set of counter cyclical policy measures as well as sector specific financial interventions. Dr. Drabu said A wide ranging set of financial initiatives focused on helping trade, services, industry, transport, agriculture & horticulture sectors in J&K State, are included in the package to rehabilitate and revive the businesses here besides giving relief to consumers, entrepreneurs, and producers.
Relief in terms of interest includes an interest rate reduction in the range of 100 basis points to 300 basis points across all categories of borrowers including SMEs, agriculturists and horticulturists, producers, consumers and government employees. This sectoral initiative from the bank covers all types of facilities, like term loans, working capital, consumption loans, consumer loans, housing loans and vehicle loans.
Under MSME restructuring All accounts covered under the guidelines issued by R.B.I. vide circular dated December 8, 2008 which were standard accounts on September 1, 2008 would be treated as standard accounts on restructuring provided the restructuring is taken up on or before January 31, 2009 and the restructuring package is put in place within a period of 120 days from the date of taking up the restructuring package. Also, the period for implementing the restructuring package would be 120 days in respect of all accounts excepting real estate, capital markets & consumer/consumption loans. The Bank may as part of debt restructuring takeover outstanding of principal amount only from State Financial Corporation. The Bank Branches have been instructed to immediately identify such accounts and submit the cases to the competent level of the Bank for approval etc.
The comprehensive restructuring package for Revival & Rehabilitation of sick industrial units identified by the bank and that have potential for growth shall provide the requisite financial assistance to such units. As a step towards providing relief package to transporters in the J&K State, it has been decided that repayment period in case of Transport Sector in J&K shall now be 7 years instead of 5 years, as at present. In case where transporters have difficulty in repaying installments on account of disruption in earnings due to closure of transport movement during turmoil, branches shall be advised to apportion the amount equivalent to 1, 2 or maximum 3 installments pertaining to August, September & October 2008 and adjust the same in remaining tenure including extended period and rework the repayments accordingly for the said period.
To provide relief to the fruit growers, 70% of the credit limit swould be considered as permanent core component and the remaining 30% as revolving part. The credit limit under the scheme should be renewed/reviewed annually subject to adjustment of 30% of the total limit by the borrower till formal renewal of the limit and drawals in the account to be allowed upto 70% of the previous years limit".
The bank has also announced its Preferred Interest Rate for J&K Government and PSU employees reducing thereby its interest rates on housing, consumer, consumption and education loans to government employees. In a move to provide adequate financial assistance to middle income group government employees, the bank has in its package given special relaxation in the eligibility criteria for availing different loans to such employees.
The package comes in the wake of the repeated rounds of civil unrest and associated violence in the recent that has plagued the state along with global recession that have caused serious concerns about the stability of the J&K economy. While giving background of the J&K Bank sectoral initiatives containing massive relief, revival and rehabilitation package for its customers in J&K, Dr. Haseeb A Drabu, Chairman and Chief Executive of the Bank said, The overall macro-economic framework has being structurally impaired and well-established business networks have been disrupted, entrepreneurs, traders, horticulturists and transporters, indeed all the segments of business, have been impacted. Not only has the State investment climate been adversely affected, the business environment has also deteriorated rapidly."
"While facing a full blown economic depression, that there is need for pro-active management of the economy. The regressive trends in the economy need to be addressed through a set of counter cyclical policy measures as well as sector specific financial interventions. Dr. Drabu said A wide ranging set of financial initiatives focused on helping trade, services, industry, transport, agriculture & horticulture sectors in J&K State, are included in the package to rehabilitate and revive the businesses here besides giving relief to consumers, entrepreneurs, and producers.
Relief in terms of interest includes an interest rate reduction in the range of 100 basis points to 300 basis points across all categories of borrowers including SMEs, agriculturists and horticulturists, producers, consumers and government employees. This sectoral initiative from the bank covers all types of facilities, like term loans, working capital, consumption loans, consumer loans, housing loans and vehicle loans.
Under MSME restructuring All accounts covered under the guidelines issued by R.B.I. vide circular dated December 8, 2008 which were standard accounts on September 1, 2008 would be treated as standard accounts on restructuring provided the restructuring is taken up on or before January 31, 2009 and the restructuring package is put in place within a period of 120 days from the date of taking up the restructuring package. Also, the period for implementing the restructuring package would be 120 days in respect of all accounts excepting real estate, capital markets & consumer/consumption loans. The Bank may as part of debt restructuring takeover outstanding of principal amount only from State Financial Corporation. The Bank Branches have been instructed to immediately identify such accounts and submit the cases to the competent level of the Bank for approval etc.
The comprehensive restructuring package for Revival & Rehabilitation of sick industrial units identified by the bank and that have potential for growth shall provide the requisite financial assistance to such units. As a step towards providing relief package to transporters in the J&K State, it has been decided that repayment period in case of Transport Sector in J&K shall now be 7 years instead of 5 years, as at present. In case where transporters have difficulty in repaying installments on account of disruption in earnings due to closure of transport movement during turmoil, branches shall be advised to apportion the amount equivalent to 1, 2 or maximum 3 installments pertaining to August, September & October 2008 and adjust the same in remaining tenure including extended period and rework the repayments accordingly for the said period.
To provide relief to the fruit growers, 70% of the credit limit swould be considered as permanent core component and the remaining 30% as revolving part. The credit limit under the scheme should be renewed/reviewed annually subject to adjustment of 30% of the total limit by the borrower till formal renewal of the limit and drawals in the account to be allowed upto 70% of the previous years limit".
The bank has also announced its Preferred Interest Rate for J&K Government and PSU employees reducing thereby its interest rates on housing, consumer, consumption and education loans to government employees. In a move to provide adequate financial assistance to middle income group government employees, the bank has in its package given special relaxation in the eligibility criteria for availing different loans to such employees.