Prestigious meeting of the heads of a number of premier banks of the country on the behest of the Governor of Reserve Bank of India was held in Srinagar recently. The bankers were approached by the Chief Minister to adopt liberal policy of providing loans and advances to the State entrepreneurs in various areas to improve economy of the State. The Chief Minister made the dual request of liberalizing the rules for the State entrepreneurs so that some of the key areas of production like agriculture, horticulture, tourism, handicrafts etc. receive a boost. There was the need that State’s low Credit Deposit Ratio (CDR) is brought at par with RBI’s stipulated level of 60 per cent. In comparison, the State had low CDR of 46 per cent only. It was for the second time that the State Government raised the question of recapitalization of three Cooperative Banks in the State namely in Jammu, Anantnag and Baramulla. If their recapitalization is not done, they would be on the brink of much financial crisis.
We are sanguine that the Heads of the premier banks who were assembled in the meeting will have taken a proper note of the approach of the State Government. While more liberal policy of lending was requested, the question of liquidity of loans also came up, For various reasons, mostly the devastating floods of the last year, loan liquidating capacity has come down. This issue has to be addressed in a more realistic manner. It was suggested that a committee should be constituted to study the case of repayment of loans and make appropriate suggestions.
The State representatives made a strong case for liberal loans to the horticulturists of the State stating that horticulture was one of the mainstays of our economy. Apple industry in the valley has suffered badly during the floods and also owing to various other difficulties. The State Horticulture Department was planning to change old and unproductive orchards with intensive plantation and new methods of nurturing horticulture plants. For the fulfillment of this plan, the horticulturists need financial support with easy and long term loans which alone would make the reform a success.
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