The Emergency Credit Line Guarantee Scheme (ECLGS) was conceived as a lifeline for businesses struggling to cope with financial distress and economic uncertainty. Its objective was simple: ensure that viable enterprises receive timely financial support to sustain operations, protect jobs and revive economic activity. If genuine borrowers are unable to access this assistance because a guarantor has passed away, become seriously ill or moved away, then the very spirit of the scheme is being defeated.
The concerns raised by borrowers associated with J&K Bank deserve immediate and serious attention. Many traders and industrial units reportedly maintain satisfactory repayment records and have operational businesses, yet they are unable to avail the additional 20 per cent working capital under ECLGS 5.0 due to the unavailability of their original guarantors. This is not a question of unwillingness to repay; it is a procedural roadblock that has little to do with the financial health of the borrower.
Banking institutions are expected to safeguard public money, and no one disputes the need for prudent lending practices. However, prudence should not become rigidity. If a borrower has demonstrated financial discipline over the years and is willing to provide a fresh, financially sound third-party guarantor, there appears to be little justification for denying access to a government-backed credit guarantee scheme solely because the original guarantor can no longer fulfil that role.
A practical solution is both possible and reasonable. J&K Bank can examine each case individually, assessing repayment history, business performance, financial viability and the credentials of the proposed substitute guarantor before granting approval. Such an approach would protect the bank’s interests while ensuring that deserving businesses are not unfairly excluded.
The stakes are high. Working capital is the lifeblood of any enterprise. Delays in accessing funds can disrupt production, delay payments to suppliers, affect salaries, reduce business confidence and ultimately impact employment. In Jammu and Kashmir, where businesses have already endured years of economic disruptions, every avoidable procedural hurdle further weakens the fragile commercial ecosystem.
ECLGS 5.0 was introduced to support businesses, not to trap them in technicalities. The scheme’s success should be measured by how effectively it reaches deserving borrowers, not by how many are turned away due to circumstances beyond their control. J&K Bank has long projected itself as a partner in the economic development of Jammu and Kashmir. Addressing this issue with flexibility and fairness would reinforce that commitment. At the same time, the administration and financial regulators should facilitate policy clarity wherever required so that procedural bottlenecks do not undermine a scheme designed to strengthen the business community.
The message is clear: genuine borrowers should not be punished for circumstances they neither created nor can control. Banking rules must protect the system, but they must also serve the people they are meant to support. When policy and practicality move together, businesses grow, jobs are protected and the economy benefits.
