Srinagar, May 1: Jammu and Kashmir Bank charging interests on the loans has put the customers in a quandary. They are unable to decide whether the moratorium on monthly loan installments has helped them or not.
“The interest on our loans is getting accumulated. It means we will have to keep on paying the interests even in these difficult times when our income is zero,” a businessman told Precious Kashmir.
It’s in place to mention here that soon after the Prime Minister announced lockdown in March to prevent COVID-19 from spreading, the Reserve Bank of India (RBI) eased conditions on term loans and said that all lenders could allow three-month moratorium or repayments.
“All commercial banks including regional rural banks, cooperative banks, NBFCs (including housing finance companies) and lending institutions are being permitted to allow a moratorium of three months on payment of installments in respect of all term loans outstanding as on March 1,” RBI Governor, Shaktikanta Das, had told a news conference in New Delhi on March 27.
However, according to the moratorium guidelines, only EMIs were deferred but banks were allowed to charge the interest. “The RBI didn’t waive of the interest. Banks will keep on charging the interest only the repayment period has been extended,” said a banker.
A politician said, “The Banks will keep on earning interest irrespective of whether their clients earn anything or not. The RBI should revisit its decision and waive of the interests for these three months. It would really bring some relief for the common people otherwise it’s a half-hearted move, which won’t give much respite to the borrowers.”
He said that soon after the RBI asked the banks to give a choice to customers to opt for the moratorium many experts raised this point but no attention was paid towards it.
Another businessman said, “Kashmir has been witnessing uncertainty since August 5, 2019 (when the Government of India announced its decision to revoke J&K’s special status and divided it into two union territories). Restrictions followed by a prolonged shutdown made everyone suffer. This season is almost gone due to the outbreak of COVID-19. The Kashmir economy has been hit badly. People have no idea about how they will come out from this quagmire of uncertainty. How will they manage to pay back the loans along with the interest which is getting accumulated with each passing day.”
He said that the Government of India needs to announce a special economic package for Kashmir so that people could breathe easily. “If no one comes for the rescue of Kashmiris it will become very difficult for them to repay their loans. There needs to be some out of box solution to solve the economic crisis which have engulfed Kashmir,” the businessman added.
It’s in place to mention here that Kashmir Chamber of Commerce and industries in a report released this year had stated that one lakh youth lost their jobs post August 5, 2019, in Kashmir and many small scale units had to pulldown their shutters due to the lack of financial resources.