Calls for Greater Awareness on RBI-Backed TReDS Platform, Easier Access to Loans and Pragmatic Approach Towards Stressed Accounts
Srinagar, May 13 (KNB): The Kashmir Chamber of Commerce and Industry (KCC&I) on Tuesday participated in the 70th meeting of the Empowered Committee on Micro, Small and Medium Enterprises (MSMEs) for the Union Territories of Jammu & Kashmir and Ladakh, held at Jammu, where the Chamber strongly advocated for enhanced MSME financing, wider awareness regarding RBI-backed digital financing platforms, easier access to collateral-free credit, and a practical approach towards stressed business accounts in the Union Territory.
As per the statement issued to Kashmir News Bureau-KNB, the Chamber was represented by its Junior Vice President, Farooq Amin, who raised several concerns relating to MSMEs, industrial units, startups, tourism-linked enterprises, handicrafts, and small businesses operating across Jammu and Kashmir.
During the meeting, KCC&I highlighted the acute lack of awareness regarding the Trade Receivables Discounting System (TReDS), an RBI-regulated digital platform aimed at helping MSMEs unlock working capital through discounting of trade receivables and invoices with banks and NBFCs in a transparent, paperless and collateral-free manner.
The Chamber stated that TReDS has the potential to significantly improve liquidity for MSMEs by enabling suppliers to receive timely payments against invoices raised on corporates, Public Sector Undertakings (PSUs), and government departments. However, it observed that awareness regarding the platform among MSMEs in Jammu and Kashmir remains extremely low.
Farooq Amin stated that proper awareness and outreach regarding TReDS at an earlier stage could have substantially helped businesses address the severe liquidity constraints presently faced by the MSME sector in Jammu and Kashmir.
KCC&I urged banks, financial institutions, TReDS operators, and government departments to undertake aggressive awareness campaigns and stakeholder outreach programmes across industrial estates and business clusters in the Union Territory.
Regional Director RBI J&K, Chandrashekhar Azad, while responding to the concerns raised by the Chamber, emphasized that Udyam Registration is mandatory for MSMEs to avail benefits under several government and RBI-supported schemes. He directed banks to intensify awareness regarding Udyam Registration and instructed that KCC&I should be actively involved in awareness campaigns to ensure wider outreach among entrepreneurs and business stakeholders.
The RBI Regional Director also instructed banks and TReDS-related institutions to increase publicity and awareness regarding the platform among MSMEs and industrial units across Jammu and Kashmir.
KCC&I further raised serious concerns over the low disbursement of loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme in Jammu and Kashmir. The Chamber stated that despite the scheme being designed to facilitate collateral-free loans, entrepreneurs and business units in the region continue to face demands for collateral security, personal guarantees, and cumbersome banking procedures.
The Chamber observed that average loan disbursement figures under MSME schemes in Jammu and Kashmir remain considerably lower compared to several other regions of the country and stressed the need for corrective intervention.
KCC&I emphasized that the prevailing unemployment situation in Jammu and Kashmir necessitates easier access to low-interest credit and simplified financing procedures for startups, youth entrepreneurs, and existing business units. The Chamber urged banks to facilitate financial assistance under flexible and entrepreneur-friendly norms without excessive insistence on collateral security and guarantees.
The Chamber further stressed that the objective of MSME financing should be to encourage entrepreneurship and economic activity rather than create procedural hurdles discouraging genuine business initiatives.
KCC&I also raised the issue of rigid banking practices in relation to MSME financing, particularly the excessive dependence on CIBIL scores and technical classifications without adequately assessing the extraordinary circumstances faced by businesses in Jammu and Kashmir.
The Chamber pointed out that several sectors, particularly tourism and allied industries, have suffered repeated economic setbacks due to unforeseen developments, including the recent impact on tourism following the Pahalgam incident in April last year and other disruptions affecting business activity and repayment capacity.
KCC&I urged banks and financial institutions to adopt a pragmatic and humanitarian approach while dealing with stressed MSME accounts and avoid coercive recovery practices, public “name and shame” measures, and harsh classifications that further damage already distressed enterprises.
The Chamber strongly advocated that entrepreneurs facing genuine financial distress should be provided a dignified and consultative resolution mechanism. It also demanded that the Chamber be made part of consultative committees dealing with stressed MSME accounts and NPAs so that banks, entrepreneurs, and trade representatives can collectively arrive at workable solutions.
During the meeting, the RBI Regional Director advised banks to engage more actively with KCC&I and seek the Chamber’s assistance in resolving issues relating to collateral requirements, MSME distress, and financing bottlenecks.
KCC&I also highlighted the importance of the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, which provides 100 per cent government-guaranteed, collateral-free additional credit support to MSMEs, and stressed the need for wider awareness and easier access to the scheme for businesses affected by economic distress and liquidity constraints in Jammu and Kashmir.
The Chamber further highlighted the high rejection rates being witnessed under various self-employment and livelihood generation schemes including PM SVANidhi, PM Mudra Yojana, and PM Vishwakarma Yojana.
KCC&I stated that many deserving applicants are unable to avail benefits under these schemes due to procedural delays, documentation hurdles, and lack of awareness at the implementation level. The Chamber sought a comprehensive review of rejection patterns under these schemes to ensure that eligible beneficiaries are not deprived of institutional support.
The Chamber also urged banks and financial institutions to undertake regular financing reviews of industrial clusters and ensure equitable credit flow to sectors contributing significantly to employment generation and exports from Jammu and Kashmir.
KCC&I appealed to all MSMEs, startups, entrepreneurs, traders, artisans, and industrial units in Jammu and Kashmir to complete their Udyam Registration at the earliest to avail benefits under various government schemes, RBI initiatives, institutional financing programmes, and credit support mechanisms.(KNB)