Jammu: Reserve Bank of India (RBI) is taking initiatives to create a stronger financing structure in Jammu and Kashmir, its Governor Raghuram Rajan told Chief Minister Mehbooba Mufti who wanted banks to help young and budding entrepreneurs to establish viable business units.
Rajan discussed with Mehbooba a 12-point plan aimed at putting together a stronger financing structure in the state which goes beyond conventional banking.
At a luncheon meeting with Mehbooba, he said the first priority will be to create linkages of finance by overcoming physical barriers which will help in integrating the state with the rest of the country and empowering young local entrepreneurs.
“We are taking measurable short-term initiatives. I think J&K is in a better position in making the state easy for financing, which can be a model for the rest of the country to emulate,” the RBI Governor added.
Mehbooba said she expects the RBI to do more in exerting pressure on banks operating in the state so that small and medium enterprises have hassle-free access to loans.
Asking premier financial institutions to broaden the scope of their business operations, Mehbooba said banks need to focus on priority sector lending in the state, particularly targeting tourism, handicraft, handloom, agriculture and allied segments, which have a huge potential to generate avenues of employment for youth in J&K.
She said the state’s economy needs resuscitation as it has gone through very difficult times in the past few years.
“We need to achieve RBI benchmark of 60 per cent CDR (Corporate Debt Restructuring) for which banking institutions have to scale up lending,” she said, asking RBI to help efforts to create job opportunities for the talented human resource in the state.
Favouring uptick vis-a-vis lending in core sectors, he said banks should look at social sector responsibilities as thrust areas and advance hassle-free loans to bright entrepreneurs and agriculturists.
This, she observed, will come as an elixir to J&K’s economy, which is showing encouraging upward trend.
“The banks need to supplement the efforts of the state government in revitalizing industry and agriculture,” she said.
Chief Secretary, B. R. Sharma and Principal Secretary to the Chief Minister, Navin K. Chaudhary, who also holds the charge of the Finance Department, attended the meeting. From RBI side, Regional Director, RBI, Damrudhar Sethi and CGM and Executive Assistant to RBI Governor, Vivek Agarwal, participated.
Asking premier financial institutions to broaden the scope of their business operations, Mehbooba Mufti said banks need to focus on priority sector lending in the state, particularly targeting tourism, handicraft, handloom, agriculture and allied segments, which have a huge potential to generate avenues of employment for youth in J&K. She said the state’s economy needs resuscitation as it has gone through very difficult times in the past few years.
“We need to achieve RBI benchmark of 60 per cent CDR for which banking institutions have to scale up lending,” she said, asking RBI to help J&K’s efforts in creating job opportunities for our talented human resource.
Dr. Rajan discussed with the Chief Minister a 12-point plan aimed at putting together a stronger financing structure in the state which goes beyond conventional banking.
He said the first priority will be to create linkages of finance by overcoming physical barriers which will help in integrating the state with the rest of the country and empowering young local entrepreneurs.
The Chief Minister also requested RBI Governor to expedite working out modalities for establishing banking facilities for cross-LoC trade. She said the switch from barter to banking at two trading points of Salamabad and Chakan da Bagh will expand the scope and ambit of cross-LoC commerce.
The Regional Director informed the meeting that as per revised RBI guidelines every village having population in excess of 5000 will have a bank branch. He said once 121 uncovered villages which qualify are allocated to various banks by 2017, J&K hinterland will have a healthy network of banks.
While appreciating the concern of the Chief Minister, Regional Director said a consortium of five banks – JKB, SBI, Canara, ICICI, PNB and HDFC – will conduct coaching classes for job aspirants in Jammu, Srinagar and Ladakh to boost employability of youth in banking sector.