Kashmir Industry Body Urges Immediate Moratorium on SARFAESI Actions to Protect MSMEs | Kashmir Life

SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has called for an urgent, time-bound moratorium on coercive recovery actions under the SARFAESI Act by banks, including JK Bank, targeting Micro, Small, and Medium Enterprises (MSMEs) in Jammu Kashmir. The move comes amid growing concern that aggressive enforcement of the Act could jeopardise the fragile industrial ecosystem and threaten livelihoods across the region.

In a statement, FCIK highlighted the risks of attaching and dispossessing residential and productive assets of entrepreneurs, stressing that such measures could inflict irreparable damage on enterprises that have endured decades of instability, prolonged shutdowns, natural disasters, and repeated economic shocks.

“Banks have a legitimate responsibility to safeguard public funds, but a mechanical and coercive recovery approach risks wiping out businesses that are the backbone of Kashmir’s economy,” said Shahid Kamili, Head of the FCIK Advisory Committee. “Forcing families out of their homes in the name of recovery not only erodes human dignity but also undermines entrepreneurial confidence and social stability.”

FCIK urged the Chief Minister, Deputy Chief Minister, the Advisor to the Chief Minister, and top administrative authorities to intervene urgently, noting that indiscriminate SARFAESI enforcement at this juncture could counteract ongoing policy reforms aimed at industrial revival.

The Federation stressed that the Government of JK is reviewing the Industrial Policy 2021-30, which emphasises revival, restructuring, and rehabilitation of stressed enterprises. FCIK advocated for the inclusion of mechanisms for offloading distressed units, reviving viable businesses, and restoring productive activity to boost employment and sustainable economic growth.

Highlighting the current high-level government committee chaired by the Finance Secretary, with representation from the Industries and Commerce Department and JK Bank, FCIK noted that recommendations for a credible One-Time Settlement (OTS) framework for NPAs are yet to be finalised.

As a constructive alternative, FCIK proposed the creation or effective utilisation of an Asset Reconstruction Company (ARC) to park non-performing assets. Such a framework, the Federation noted, would allow banks and entrepreneurs to resolve stressed accounts professionally and in a time-bound manner, offering either a revival pathway or a dignified exit.

FCIK also warned that aggressive enforcement actions are sending a discouraging message to the youth of the region. “At a time when startups, self-employment, and industrial growth are being promoted, coercive measures are deterring young people from venturing into entrepreneurship, even as industry remains the only viable path for large-scale employment and economic stability,” the Federation stated.

While reiterating that it does not condone willful defaults, FCIK urged a humane and calibrated approach, including a temporary moratorium on SARFAESI actions until the Industrial Policy review is concluded, the OTS framework is operationalised, and a structured distress-resolution mechanism is in place.

“The moment calls for coordination, not confrontation, between the Government, banks, and industry,” FCIK emphasised. “A compassionate and pragmatic response today can restore confidence, protect livelihoods, and pave the way for a renewed industrial resurgence in Jammu Kashmir.”