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| JK Bank cuts down prime lending by 175 basis points | | |
Early Times Report
Srinagar, May 5: The Jammu and Kashmir Bank has drastically cut down its prime lending rate by 175 basis points from 14.50 per cent to 12.75 per cent. From sectoral point of view, the interest rates have been even slashed down by 3.75 per cent. In a bid to crank up the craft economy of the state, the Bank also announced four significant financial products under a special package for the revival of craft industries that have been hit hard by the severe global economic recession.
Announcing the packages in a jam-packed press conference here at the Bank’s Corporate Headquarters, Dr Haseeb A. Drabu, Chairman and Chief Executive, J&K Bank, said, “To support the craft industries and around five lakh people associated with it, J&K Bank has devised four products for the exporters, manufacturers, traders and artisans so that they are able to survive the most severe recession in recent times which has dealt a major blow to the crafts segment here that accounts for the annual turnover of Rs 2000 crores”.
The package comprises of four products. The products have been designed to support the industry through the expected recessionary period of 18 months. The major feature of the package is that the repayment of the loan by the exporters/manufacturers/traders will start only after 18 months while as the craftsmen shall repay once their products are purchased by the exports/traders.
Expressing concern over the distress experienced by the artisan community he said, “Lack of demand for exports, decline in sales for traders and no demand to weave for artisans and its impact on dyers, washers etc has put almost two lakh jobs at stake. And we as the principal bankers of the state of Jammu and Kashmir will provide them with the livelihood finance for survival. Our intervention aims to cushion the industry financially and avoid extreme social situations like recent instances of farmers’ suicides in Orissa and other states,” said Dr. Drabu.
Moreover, through this intervention we are enabling a long-term capacity building, he added.
The four packages announced are J&K Bank Handicrafts Sustenance Finance for Exporters/Manufacturers/Traders (under trilateral arrangement), J&K Bank Handicrafts Sustenance Finance for Craftsmen (under trilateral arrangement), J&K Bank Craftsmen Livelihood Finance and J&K Bank Revised Dastakar Finance.
By virtue of these trilateral arrangements, J&K Bank will enter into an agreement with Exporters/ Traders/Retailers and Craftsmen. “Under these schemes we are stepping in to finance the artisans either through exporter or directly” Dr Drabu said, adding, “Actually we want exporters not to act as financiers so that the decision of selling the product remains independently with the craftsmen”, Dr Drabu said.
The bank will provide the requisite finances to Exporters/Traders/Retailers for purchase of the handicrafts from the craftsmen while as the craftsmen will be financed to purchase the raw materials and hire other related services like washing, dying etc.
Notably, the bank shall be charging soft interest rate on the products designed exclusively for handicrafts sector.
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