Kashmir Businesses in Distress: KCCI pushes for extended loan settlement window

Srinagar, Jun 24: In the wake of recent economic disruptions caused by the Pahalgam terror attack, the Kashmir Chamber of Commerce and Industry (KCCI) has appealed to the J&K Bank to extend the repayment deadline under its Special One-Time Settlement (OTS) Scheme — Karz Se Mukti — by at least six months.

The scheme, which allowed eligible borrowers to settle outstanding dues under a time-bound offer, had set June-end as the repayment deadline for applicants who registered by March 31. However, KCCI stated that the tragic Pahalgam incident and its impact on tourism, trade, and overall business sentiment in the Valley have left many entrepreneurs struggling to arrange the required funds within the existing timeframe.

In a statement, KCCI said the proposed extension would give affected borrowers a fair chance to meet their obligations without defaulting, while also reflecting the bank’s commitment to supporting local businesses in times of crisis.

The Chamber also reminded that the J&K Bank management had earlier assured stakeholders of introducing a new OTS scheme with a higher settlement ceiling, aligned with MSME guidelines, to accommodate larger stressed accounts that were excluded from the Karz Se Mukti initiative. KCCI urged the bank to immediately roll out this new scheme to provide meaningful relief to medium-scale enterprises currently under financial strain.

Highlighting the fragile market conditions and growing distress among business units, KCCI said such responsive and inclusive financial interventions are essential to restoring confidence and reviving economic activity in Jammu and Kashmir.

The Chamber reiterated that timely support from the banking sector will be crucial in helping the Valley’s economy recover from the compounded challenges of declining business activity and security-related setbacks.