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Nationalised banks to reopen branches in Kashmir

Mukhtar Ahmad in Srinagar

All the 50 branches of various nationalised banks, except the State Bank of India, in Jammu and Kashmir which were closed for the past seven years, would be reopened by December 31.

This decision was taken at a meeting attended by Union Finance Minister P Chidambaram, Jammu and Kashmir Chief Minister Farooq Abdullah, the state chief secretary, the chairman and chief executives of the nationalised banks, and the heads of various financial institutions.

The meeting decided wherever needed, the Jammu and Kashmir Bank would lend its officers temporarily to man the reopened branches till the banks make their own arrangements.

The State Bank officers promised to reopen their branches by March next year.

The branches of various nationalised banks, about 50 in number, closed down after receiving threats from various militant groups, who asked the banks to shut down. Early in 1990, the militants also asked the people to withdraw their money from the various nationalised banks and deposit it in the Jammu and Kashmir Bank.

The affected banks later shifted their branches to Jammu while some closed down. This in turn caused immense difficulties and hardships to the general public.

A State Bank of India official explained: "There was no security in our branches. The militants robbed money worth million from various banks in the past seven years. We had no choice but to close."

The Jammu and Kashmir government has opened the offices of various banks in a heavily guarded hotel.

While Abdullah assured Chidambaram of full security to the branches in the valley, the Union finance minister promised the state full help in reviving the economy and ensuring greater credit flow to the state over the next six months.

The process of sanctioning cases under the self-employment schemes is also to be accelerated. Credit facilities and targets covering 10,000 youth under the state's self-employment scheme would be reviewed and refixed 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 100 million to the State Industrial Development Corporation. IDBI would give also ad hoc credit of Rs 50 million 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, the National Bank for Rural Development has offered credit with a 20 per cent advance for infrastructure development.

Over Rs 350 million has been sanctioned under the Rural Infrastructure Development Fund. Credit would also be available for citrus, saffron and apricot farming in the horticulture sector.

The state government has also taken up with the Centre the state's tourism package, which includes waiving off interest, rescheduling of repayment, fresh credit, and reconstruction of infrastructure.