The Kashmir Chamber of Commerce and Industry (KCCI) participated in a Town Hall Meeting organized by the Reserve Bank of India (RBI) in Srinagar on Tuesday. The delegation, spearheaded by Senior Vice President Ashiq Hussain Shangloo, included Secretary General Faiz Bakshi, and Executive Committee members Gowhar Maqbool and Dr. Touseef Ahmad Bhat.
During their extensive discussions with RBI Regional Director Chandrashekhar Azad, the KCCI representatives articulated profound concerns regarding the persistent inadequacy of financing mechanisms for Micro, Small, and Medium Enterprises (MSMEs) and Startups throughout the Kashmir region. The interactive meeting was attended by top executives of banks operating in Kashmir.
The MSMEs across the Kashmir Valley are experiencing significant disappointment with the current state of financial support systems. Banks and financial institutions operating in Kashmir commonly cite RBI guidelines to justify complex procedural requirements, many of which appear to directly conflict with Supreme Court directives on business financing accessibility, which needs clarification.
The KCCI delegation emphasized Kashmir's alarming unemployment rate of 32.8% in the Urban Age group of 15-29 years as the Ministry of Statistics and Programme Implementation (MoSPI) necessitates extraordinary measures to support entrepreneurial initiatives. KCCI presented detailed observations on how startups and MSMEs face numerous operational challenges due to what they described as the practically non-existent ease of doing business environment in Kashmir.
There exists a troubling disconnect between officially reported statistics on MSME development and employment generation, and the ground realities witnessed. This discrepancy raises fundamental questions about policy implementation effectiveness and demands immediate attention from financial regulators.
The Chamber referenced specific findings from the Parliamentary Standing Committee that highlight systematic failures by banking institutions to adequately support Kashmir's emerging business ecosystem. KCCI representatives provided concrete examples of obstacles entrepreneurs face, including severely limited access to the Prime Minister's Employment Generation Programme (PMEGP), procedural complications in business establishment, and prohibitive financing conditions that disproportionately affect Kashmiri businesses.
During the detailed presentation, KCCI also addressed concerns regarding CIBIL score assessment methodologies in the region, advocating for contextual evaluation mechanisms that account for Kashmir's unique economic circumstances. There were various presentations presented by officials which were highly appreciative, particularly the presentation by officials representative from CIBIL.
KCCI also raised the issue of the miser approach of public sector banks operating in Kashmir, whose lending towards the priority sector is less.
They urged public sector banks to implement specialized regional development priorities for Kashmir that acknowledge its distinctive challenges.
The national economic ambition of achieving a $5 trillion economy cannot be realised through uneven development. Every region, particularly those facing extraordinary challenges like Kashmir, must be empowered to contribute meaningfully to this goal through tailored financial inclusion strategies and not discriminate on the basis of geographical location.
As a concrete solution, KCCI formally proposed establishing a full-fledged RBI office in Kashmir, arguing that the region's geographic isolation, unique economic circumstances, and specific business ecosystem justify a dedicated regulatory presence beyond the current limited operations.
The RBI Regional Director assured the delegation that their concerns would be communicated to the central office. At the end there was a question and answer session, KCCI appreciated the RBI for organising such event.