Srinagar, Apr 9 (KNN) In a major boost for Micro, Small and Medium Enterprises (MSMEs) in Jammu and Kashmir, the government has constituted a special committee to address the long-standing issue of one-time settlement (OTS) cases faced by these enterprises.

According to an order issued by the Civil Secretariat of J&K on Monday, the committee's primary objective is to look into outstanding issues related to OTS requests from MSMEs, following the guidelines set forth by the Reserve Bank of India (RBI).

One of the key mandates of the committee is to clarify and publicise the RBI's guidelines on OTS for the benefit of all stakeholders, ensuring a transparent and streamlined process for MSMEs seeking to settle their outstanding dues.

One-time settlement (OTS) is a scheme announced by J&K Bank, which allows an MSME borrower to negotiate a lump-sum payment with the lender to settle an outstanding loan. This approach has been found to be mutually beneficial, as it enables the borrower to resolve their debt and the lender to recover a portion of the outstanding amount.

This move by the Jammu and Kashmir government comes after persistent efforts by industry chambers in both the Kashmir and Jammu regions, advocating for a more practical and negotiated settlement of non-performing asset (NPA) cases in the union territory.

The Federation of Chambers of Industries Kashmir (FCIK) has been at the forefront of this initiative, urging the government to address the challenges faced by MSMEs in settling their outstanding dues with banks and financial institutions.

The high-level committee will be chaired by the Principal Secretary to the Government, Finance Department. Other members include the Commissioner/Secretary to the Government, Industries & Commerce Department and the Executive Director of J&K Bank.

The MSME sector is a crucial component of the Indian economy, and the government has implemented various initiatives to support its growth and development. These initiatives, including those in Jammu and Kashmir, encompass providing financial assistance, simplifying regulations, and enhancing access to markets.

(KNN Bureau)