Nationalised banks in Kashmir Valley have been directed to initiate measures to reopen their branches by December 31 this year. Barring the State Bank of India, some 50 branches of nationalised banks, which had been closed in the wake of militancy in the state, are expected to resume operations.
A decision to this effect was taken at a meeting between Union finance minister P Chidambaram and state Chief Minister Dr Farooq Abdullah held here on Wednesday. Assuring the state of full help in reviving the economy, especially in the Valley, Chidambaram said the Centre would ensure greater credit flow to the state in the next six months.
Besides some Cabinet ministers and the Chief Secretary, the meeting was attended by the chairmen and the chief executives of all the nationalised banks and heads of various financial institutions. The Union additional secretary, finance, and the deputy governor of the Reserve Bank of India also participated. It was decided at the meeting that wherever needed, the J&K bank would lend their officers, temporarily, to man the reopened branches until the banks were able to make their own arrangements.
The process of sanctioning cases under self employment schemes is also to be accelerated. Credit facilities under the IRDP were also discussed. The existing targets covering 10,000 youth under the states self employment scheme, 1,300 under PMRY, 2,000 under SUME and 20,000 under the IRDP would be reviewed and re-fixed at a meeting to be held in New Delhi shortly.
The meeting also took stock of credit problems of industrial units. The Industrial Development Bank of India has agreed to provide Rs 10 crore to Sidco while Sidbi would give ad hoc credit of Rs 5 crore to the State Financial Corporation to finance new units, notwithstanding their default in payments.
To waive the penal and compound interest of sick units, Sidco and SFC are to formulate their revival plan for the rescheduling of repayment. A plan is also to be formulated to help public sector units. In the agriculture sector, Nabard has offered credit with a 20 per cent advance for infrastructure development.
Over Rs 35 crore has been sanctioned under the Rural Infrastructure Development Fund (RIDF). Credit would also be available for citrus, saffron and apricot farming in the horticulture sector. The state government also took up with the Centre, the states tourism package which includes waiving off interest, rescheduling or repayment, fresh credit and reconstruction o f infrastructure.
It has been suggested that the Centre give five per cent interest subsidy on fresh loans with the state complement at 6 per cent.
The state government has also pleaded for the re-opening of the RBI office in Srinagar in view of the improved situation.
