Appeal LG, CEO J&K Bank for replacement 

Srinagar, Feb 1: Requesting Lt Governor Manoj Sinha and J&K Bank Managing Director and CEO to replace the branch manager of the bank at the estates, the Industrial Association of Lassipora (IAL) has expressed dismay over what it called the unprofessional attitude of the branch head at IGC Lassipora.

In a written statement issued to Business Kashmir, the IAL said the manager heading the J&K Bank branch in Lassipora is displaying “unethical behaviour and unprofessionalism” towards the industrialists located at the branch.

“The branch manager’s lack of knowledge and understanding of the MSME sector has resulted in several complaints from the industrial unit holders and has raised concerns among the industries that form the backbone of the local economy,” read the statement.

Lassipora is home to over 500 micro, small, and medium-scale industries, making it one of the largest industrial growth centres in Jammu and Kashmir.

Given the vital role that banking plays in the development of industries, it is essential that banks located in the vicinity of industrial areas have personnel trained in the handling of MSMEs, it said.

The Reserve Bank of India has emphasized the importance of MSMEs as a priority sector for commercial banks.

“Therefore, the Industrial Association of Lassipora respectfully requests the Honorable Lieutenant Governor and the Managing Director & CEO of Jammu and Kashmir Bank Limited to replace the current branch manager with a professional who possesses the necessary knowledge and skills to effectively handle the MSME sector,” read the statement, adding, “Such a change would significantly contribute to the growth and development of the local industries in Lassipora.”

Highlighting the significance of the MSME sector in India, IAL called on the UT and J&K Bank authorities to take necessary measures to ensure that the operations of the J&K Bank branch in Lassipora are carried out in a fair, professional, and efficient manner.

Jasir Haqani

Srinagar, Dec 18: Federation of Chambers of Industries Kashmir (FCIK) has urged on J&K Bank authorities to withdraw their latest decision regarding levying of ‘Commitment Charges’ on the unutilised portion of the loans and credit lines provided to the enterprises.

While expressing its displeasure, the FCIK in a statement issued to Business Kashmir said that it was for the first time in the history of J&K Bank that borrowers were being made to pay for loans or the portion of loans which actually they didn’t lift or utilize. The bank would not so far levy such charges probably in acknowledgement of the un-conducive working atmosphere.

According to the guidelines issued by RBI, levying of commitment charges was not mandatory upon the financing banks but discretionary, and it was left to the wisdom of banks to charge or not to charge it, said the FCIK.

“If the plea of the bank was that they could have earned interest on the unutilised portion of the loan, had they lent it to other borrowers, the question could be asked about the gap between their credit flow and permissible limit of lending which continues to be huge despite some narrowing in the recent past,” reads the statement.

FCIK agreed that J&K Bank had been extending some small concessions including waiver of commitment charges to the borrowers of Jammu, Kashmir and Ladakh, but that was only peanuts in reciprocity to the gesture that 88.2% of the total deposits of the bank comes from the kith and kin of these borrowers at an unprecedentedly low rate of just 3.67%  which was the lowest than available to any other national or commercial bank in the country.

While criticizing the decision, FCIK questioned the wisdom of the bank to perceive that the condition of entrepreneurs had changed for to better now to take additional brunt even after facing long spells of business interruptions from the 2014 floods to the aftermath of the Covid-19 situation. The bank should know that currently the product market appetite ran at its lowest ebb for the complexities caused by these situations besides the change in policies which obviously resulted in the lifting of lower amounts from sanctioned credit lines, reads the statement.

Hailing the prudent entrepreneurs for lifting only the required portion of the amount out of their sanctioned credit line in tune with market demand for their products, FCIK cautioned the bank not to force them to lift entire sanctioned loans for illegally siphoning it off towards any other non-bonafide activity. It was as such imperative upon the bank to withdraw the decision of levying commitment charges till the product market appetite stabilized.

Bid to be invited soon for disinvestment of the PSU

BK News

SRINAGAR: J&K Government has approved a proposal for the privatisation of JK Cements Ltd, a public sector undertaking of Jammu and Kashmir incorporated in 1974.

An official statement released here on Sunday said, “after exploring all possibilities for revival of the Jammu and Kashmir Cements Ltd, the Administrative Council (AC) which met here under the chairmanship of the Lieutenant Governor, Manoj Sinha, approved the proposal for disinvestment of Jammu and Kashmir Cements Limited.”

Rajeev Rai Bhatnagar, Advisor to the Lieutenant Governor and Dr Arun Kumar Mehta, Chief Secretary, J&K attended the meeting.

It said the disinvestment in the JK Cements Ltd was necessitated as the company was not able to sustain and manage its finances properly and maintain efficiencies of operations over the period of time.

The company was also not able to fully exploit the potential and sustain stiff competition in the market despite having dedicated limestone mining leases at its disposal.

Inspite of enjoying economy of scale, the company failed to show requisite growth and generate cash flows and operating margins during the last more than two decades.

The company despite having assured demand from the Government against advance payments has not grown even marginally over the long period of time and has rather shown sharp decline in its production and revenues from 2012-13 on wards. Managerial and financial inefficiencies, coupled with failure to exploit locational advantage, has made the company defunct further depreciating plant and machinery without any resultant productivity.

The company had not only accumulated losses but is also burdened with liabilities on account of salaries and outstanding wages and payments in addition to default in statutory deductions like CP fund, GST etc.

Earlier also the Administrative Council vide its decision No. 113/15/2021 dated 19.10.2021 had given in-Principle approval for complete sale of JK Cements Ltd by exploring the option of ascending e-auction and an authorization to utilize 240 kanals of land adjacent to Khrew Plant at Industrial Estate.

The Interested Bidder should have a Minimum Net-worth of Rs 250 Crore. The Interested Bidder should have a net positive EBITDA in at least three out of the immediately preceding last five financial years. Eligible Entities are permitted to form a Consortium to participate in the Transaction. The maximum number of members, including Lead Member, in a consortium can be four.

Key principles and actions underlying the recommended disinvestment modality includes 100% ownership in JKCL in favour of a private company/consortium. Further all the assets of JKCL on an as-is-where-is basis, along with approvals and licenses (including mining license) will be transferred as part of the share purchase sale.

It was further decided that the Government of J&K will take over all employees of JKCL and the Acquirer will be responsible for staffing requirements to get the plant operational. Moreover all legacy and material liabilities will be carved out and assigned to the Union territory.

All the pre-bid requirements including renewal of lease in favour of the Corporation, power availability, finalization of accounts and their audits etc. shall be completed before the start of auction process. While disinvesting, it shall be ensured that the provisions of Mines and Minerals (Development and Regulation) Act, 1957and rules framed there under are not violated in any case. It was also decided that the process of reverse auction will be adopted for the purpose of disinvestment.

The step was expedient as the company has turned defunct for more than two years. The attempts of revival of the company have failed in absence of fund flow that could have paved way for the revival of the Company.