Excelsior Correspondent
SRINAGAR, Sept 14: On the proposal of Finance Minister Dr Haseeb Drabu, Reserve Bank of India (RBI) has agreed to examine extending the moratorium on all outstanding advances by one more year.
The Minister presented the proposal to the RBI Governor, Dr Raghuram Rajan, during a meeting held at SKICC today. The meeting was convened to discuss the findings of a study ‘how to enhance credit flow in J&K’ conducted by RBI.
The Minister said that the economic recovery after last year flood has been slow. “To prevent distress in the market I propose RBI to extend the moratorium on all outstanding advances by one more year,” said the Minister.
The move is likely to give relief to thousands of traders.
The extensive meeting which also included a special session of State Level Bankers Committee (SLBC) was also attended by Chief Secretary B R Sharma, Finance Commissioner Naveen Choudhary, J&K Bank Chairman Mushtaq Ahmad, Chief Managing Directors (CMD) and heads of various banks operating in the state.
The Minister also asked the banks to enhance the credit deposit ratio by designing various state specific financial products. “CDR for Kashmir has improved, but in Jammu it is hovering around 30 percent and for Pir Panchal region it is even lower,” the Minister said, adding that “Government is going to heavily invest in public sector in the Pir Panchal region to invigorate its local economy.”
In another major development, State Bank of India also agreed to buy season portfolio from J&K bank to improve their credit ratio.
On the complaint of various bankers who highlighted impediments to improving CDR in the State, the Minister agreed to take number of steps. “The SARFAESI ACT cannot be implemented in the state due to its special position so we are drafting own equivalent act that will suffice the need of banks operating in the State,” said the Minister.
The Finance Minister also announced to form an Asset Reconstruction Company (ARC) that will buy bad loans of state subjects from the outside banks. “The company will be a state subject and it will give outside banks a way out to offload their bad loans,” the Minister said. “We have a State Financial Corporation (SFC) and we will be looking into converting it into ARC.”
In another major development, the Finance Minister agreed to a proposal of Punjab National Bank to establish a Farmers Training Institute in the State for which State Government will fully cooperate. The Minister also asked the RBI to establish a Bankers Training Institute in the State.
The RBI Governor extended his full support for the sustainable economic development of the State. “We have lots of ideas on table and now it is time to implement the same on ground” he said adding that a group of major bankers and Government representatives will be formed to ensure implementation.
RBI Governor said that our study has shown that there is tremendous opportunity in the field of investment in sectors like power, horticulture and Tourism etc.
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