Reserve Bank of India had announced many
concessions/relaxations to trade and industry operating in the States of Punjab
and Jammu & Kashmir in respect of banking services from time to time.
Details of concessions to trade & industry in J&K 1
are given below :
(i) Increased working capital facilities may be sanctioned by
banks by way of relaxation in prescribed/standardised norms for inventory and
receivable upto a maximum of 50%, depending on the merits of each case. For
small borrowers in unorganised sector, for whom no norms for inventory and
receivables have been specified, relaxation upto a maximum of 50% of the norms
accepted for last sanction may also be allowed depending on merits. Benefits of
relaxed norms may be extended as realistically as possible to such borrowers.
As regards changes in the level of credit on purchases, the banks may take a
realistic approach for all borrowers. The incremental Permissible Bank Finance
(PBF) due to application of relaxed norms only should be limited to 50%.
The application of relaxed inventory and
receivable noi ms would, however, be subject to the condition that no slip back
in current ratio takes place, except under circumstances as specified by RBI
vide DBOD Circular CAS(COD)BC.90/27C-78 dated 17th July, 1978. These
would be applicable for all borrowers, including those not covered under Credit
Monitoring Arrangement (CMA). If the borrower is not in a position to augment
net working capital to the desired extent at one go, the need based relaxed
norms may be applied in more than one stage.
(ii) All borrowal accounts, irrespective of whether ad hoe
facilities were sanctioned in the past or not, would be subjected to review by
the concerned banks within a period of three months and need based increased
working capital limits be sanctioned wherever necessary.
(iii)
(a) Finance against accepted hundies (Usance
bills) should be encouraged,
(b) while for CMA borrowers the existing ceiling of 75 per cent on
finance against book-debts may continue, for other corporate borrowers,
liberal finance against book-debts should be made available,
(c) for non-corporate borrowers, where finance need against book-debts is modest, the mode currently in vogue in certain banks, whereby stocks as well as book-debts are financed under a single hypothecation agreement up to a maximum of Rs. 2.00 lakhs s(with share of credit against book-debts limited to 30 per cent) and for which DICGCI cover is also available regarding the book-debt portion, should be encouraged. For other borrowers, whose credit requirement against book-debts is higher, the banks should devise suitable selectivity criteria regarding the eligible borrowers, based, inter alia, on overall risk assessment and past performance in debt realisation. The banks may also evolve a system of risk differentiation, among the eligible debtors for a particular borrower and based on different criteria, variable margins, ranging from 25 per cent to 40 per cent, should be applied for purposes of arriving at drawing power.
(iv) The existing ceiling of 15 per cent on margin for calculation
of drawing power against commodities, not covered by Selective Credit Control
directives, may continue. Similarly, margin for finance against bills should
not exceed 10 per cent as hitherto.
(v) The existing concession of 50 per cent reduction in service
tariffs for remittances may continue. The same may also be extended to
collection of outstation bills/cheques.
(vi) The banks may honour small Fixed Deposit Receipts say upto Rs.
10,000/- of the Kashmiri migrants at the designated branches without
verifying details from the branch of origin against some indemnity bonds.
(vii) The
following other existing concessions summarised below should continue :
(a) For term credits, the banks may adopt a flexible and
pragmatic approach as regards debt-equity ratio, especially for small
projects. Reschedulement of the repayment programme may also be allowed in
deserving cases.
(b) The banks may review all irregular accounts within a time-frame
of three months with a view to exploring the possibilities of regularising them
through sanctioning additional working capital facilities.
(c) Period of realisation of bills purchased and advance bills
for collection may be extended upto one month by Branch Managers.
(d) Liberal acceptance credit/L.C. facilities may be extended to
facilitate purchases on credit. The margin for bank guarantees and inland
letters of credit should not exceed 15 per cent, depending on merits of each
case.
(e) The facility for transfer of bank accounts/funds maintained
with their branches in the valley to some other designated/specified branches
outside the valley, at the request of their customers, may be continued with
necessary safeguard so that unauthorised withdrawals or transfers are not
encouraged. Similarly, banks may arrange to designate specific branches outside
the valley to receive instruments drawn on their branches in the valley.
The power to reject any concession shall vest
with an authority higher than the immediate controlling authority at the
branch. The borrower customers should avail of these concessions. All banks are
required to set up a grievance redressed cell at Regional/Zonal office level
and the matter may be taken up at that level in case of any difficulty.
All the above relaxations have been extended
upto 31st March, 20041
subject to further extension by Reserve Bank of India.