Excelsior Correspondent
SRINAGAR, Feb 18: The Federation of Chambers of Industries Kashmir (FCIK) today demanded urgent measures for a Special One-Time Settlement (SOTS) scheme for stressed micro, small and medium enterprises (MSMEs), which is currently under active consideration by the management of Jammu and Kashmir Bank.
A spokesperson of FCIK said copies of the representation have also been shared with senior Government authorities and the management of J&K Bank, underscoring the urgent need for a structured framework to resolve long-standing legacy MSME NPAs, restore entrepreneurial confidence, and provide a clear pathway for distressed units to restart operations.
The spokesperson said the Federation has sought the Government’s support, as the major equity holder in J&K Bank, to formalise a calibrated, non-discretionary and non-discriminatory SOTS, distinct from routine OTS frameworks, to serve as a structured legacy-closure instrument.
According to the spokesperson, such a scheme would enable recovery of otherwise stuck assets, provide balance sheet clarity to the Bank, restore entrepreneurial dignity, revive credit culture and unlock fresh economic activity. The proposal, the Federation said, draws upon regulatory precedents issued by the Reserve Bank of India and settlement schemes implemented by leading public sector banks. Over 90 percent of the Bank’s funds, the Federation said, still originate from within the Union Territory.
The spokesperson said FCIK proposed that the SOTS cover NPAs up to at least Rs 50 crore, with waiver of unapplied and penal interest, rational principal settlement with calibrated haircuts, inclusion of failed OTS, technically written-off accounts and cases under litigation, delinking relief from collateral value, a reduced 5 percent upfront amount, and a repayment window of up to two years.
FCIK has also expressed concern, the spokesperson said, over the resurfacing of daily SARFAESI “name and shame” notices and e-auctions in newspapers, and urged that such actions be temporarily suspended pending formal notification of the SOTS Scheme.
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