FCIK seeks moratorium on SARFAESI recovery, cites risk to industrial revival
Srinagar, Jan 8: The Federation of Chambers of Industries Kashmir (FCIK) has expressed grave concern over what it described as coercive recovery actions being initiated or contemplated by banks, including Jammu and Kashmir Bank, under the SARFAESI Act against Micro, Small and Medium Enterprises in Jammu and Kashmir. The Federation has called for an immediate and time-bound moratorium on such actions, particularly those leading to attachment and dispossession of entrepreneurs’ residential and productive assets.
FCIK has urged the Chief Minister, the Deputy Chief Minister, the Advisor to the Chief Minister and the senior administrative leadership of the Union Territory to intervene urgently, cautioning that indiscriminate enforcement of SARFAESI provisions at this juncture could inflict irreparable damage on the already fragile industrial ecosystem of the region.
“Banks undoubtedly have a legitimate responsibility to safeguard public funds, but a purely mechanical and coercive recovery approach risks wiping out enterprises that have survived decades of instability, prolonged shutdowns, natural calamities and repeated economic shocks,” said Shahid Kamili, head of the FCIK Advisory Committee comprising presidents of industrial associations across the Kashmir Valley.
“Forcing families out of their homes in the name of recovery not only erodes human dignity but also extinguishes entrepreneurial confidence and social stability,” he added.
The Federation underlined that the Government of Jammu and Kashmir is currently reviewing the Industrial Policy 2021–30, with a stated focus on revival, restructuring and rehabilitation of stressed enterprises. It stressed that the revised policy must clearly provide institutional mechanisms for offloading distressed units, reviving viable enterprises and restoring them to productive industrial activity to support employment generation and sustainable economic growth.
FCIK has formally taken up the matter with the government as well as with Jammu and Kashmir Bank, and has written to the Managing Director, Amitava Chatterjee, flagging concerns that premature and aggressive SARFAESI actions undermine the very intent of ongoing policy reforms and could render proposed revival and rehabilitation frameworks ineffective even before their implementation.
The Federation also noted that the government has constituted a high-level committee under the chairmanship of the Finance Secretary, with the Secretary Industries and Commerce and the Executive Director of Jammu and Kashmir Bank as members, to recommend, among other issues, a credible mechanism for One-Time Settlement of NPAs and stressed accounts. The committee is yet to submit its recommendations.
As part of a constructive approach, FCIK proposed that the government and banking sector consider the creation or effective utilisation of an Asset Reconstruction Company to park non-performing assets. Such a mechanism, it said, would ease balance-sheet stress for banks while offering entrepreneurs either a viable revival pathway or a dignified exit, instead of prolonged litigation and asset erosion.
“An ARC-led framework can unlock trapped value, reduce confrontation and ensure professional, time-bound resolution of stressed accounts,” the Federation observed.
FCIK also expressed concern over the discouraging signal being sent to educated youth, stating that the spectacle of entrepreneurs facing relentless coercive action without humane exit or revival options is deterring young people from entering business and industry.
“At a time when public policy promotes startups, self-employment and industrial growth, such actions are pushing youth away from enterprise creation, even as industry remains the only sustainable avenue for large-scale employment and economic stability in Jammu and Kashmir,” it said.
While reiterating that it does not support willful default or avoidance of legitimate bank dues, FCIK appealed for a calibrated and empathetic approach, including a temporary moratorium on SARFAESI actions until the industrial policy review is completed, a transparent and non-discriminatory One-Time Settlement framework is rolled out, and a structured distress-resolution mechanism is put in place.
“The moment calls for coordination, not confrontation, between the government, banks and industry,” the Federation said, adding that a pragmatic response could restore confidence, protect livelihoods and pave the way for renewed industrial resurgence in the region.
