RBI extends deadline for rehabilitation of Pahalgam disturbance-hit business units till December 31

Srinagar, Dec 9: The Reserve Bank of India (RBI) has approved an extension in the deadline for implementation of the rehabilitation package for business units affected by the April–May disturbances that followed the Pahalgam attack, offering renewed hope to thousands of distressed entrepreneurs across Jammu and Kashmir.

A senior banking executive said, "Based on the recommendation of UTLBC (J&K) in its 17th meeting held on November 29, the RBI has granted extension for implementation of the package till December 31, 2025."

Following the approval, banks have been directed to ensure that all eligible borrowers are covered within the revised deadline. Cluster and Zonal Heads have been asked to sensitise field branches for timely execution, while all other terms of the relief scheme remain unchanged. Despite the package being in operation for months, progress on rehabilitation has been slow.

Figures show that out of 64,029 disturbed accounts, only 7,752—around 12 percent—have been rehabilitated till date. Banks have released assistance worth ?494 crore against the total affected exposure of Rs 5,055 crore. The rehabilitation initiative was framed after the April 22 Pahalgam attack which claimed 26 lives, triggering widespread disruption and economic distress across the region. A committee comprising J&K Bank, SBI and PNB was assigned the task of drafting a rehabilitation proposal in the 16th UTLBC meeting held on June 21, 2025. Subsequently, the J&K Government declared the entire Union Territory as disturbance-affected with effect from April 22, enabling formal rollout of the relief programme. The approved package was circulated among banks on September 6 for implementation, but field execution remains limited.

Data reveals that J&K Bank reported 36,192 affected units involving Rs 1,930.57 crore, of which only 7,133 accounts have been rehabilitated. SBI has covered 362 out of 10,800 accounts, PNB 235 of 9,581, while HDFC Bank, with exposure to 2,044 affected units worth Rs 790.93 crore, has not rehabilitated a single case yet.

An official familiar with the review said that the banks were required to complete rehabilitation by November 5, 2025, but progress remained insufficient, prompting banks to seek extension till December 31. Trade bodies have expressed concern over the slow rollout.