JAMMU: To take the cross LoC trade to the next level, the Cabinet which met here today under the Chairmanship of Chief Minister, Ms Mehbooba Mufti endorsed the proposed institutional mechanism to provide banking facilities to traders for conducting their business across the LoC.
The banking mechanism will help the trade to grow much faster and enable import and export of listed commodities at a larger scale and faster pace. It will address the regulatory aspects related to the trade between India and Pakistan.
The Commercial banks in Jammu & Kashmir and Pakistan occupied Kashmir would provide a facility to their respective exporters to realize their dues by opening a Trade Facilitation Account at their end. The initial debit and final credit by the exporters bank would be through the facilitation account.
The facilitation account will enable the banks to charge handling/documentation/interest charges. It will also afford a cushion to the banks to bear exchange loss on banks books depending on the exchange rate movement.
On credit basis model, the exporter will get the money on day one with the bank debiting facilitation account and parting with its funds until they are paid by the importer and the amount is credited to the Nostro account. Interest payable for transactions based on credit shall be included in the facilitation fee. The facilitation fee, for credit based transactions would include interest, documentation charges and handling charges etc.
Transactions shall be possible on collection basis as well bills purchased/discounted/collected basis. No interest shall be payable on transactions done on collection basis.
The goods shall be invoiced in exporters domestic currency. Hence, there is no exchange risk for the exporters. Any exchange risk shall be borne by the importer.
The settlement would be done in US Dollar with the cross rates between the two currencies arrived via dollar.
Cabinet approves 5% interest subsidy for four years for flood hit traders/business
JAMMU: Extending major relief to September -2014 flood affected traders/business units, the Cabinet which met here today under the Chairmanship of Chief Minister, Ms Mehbooba Mufti accorded sanction to the grant of 5% interest subvention w.e.f 1st April, 2016 with a cap of Rs 5 Lac per unit for a period of four years.
This means subsidizing interest on loan to flood hit traders/ business to an extent of 5% starting from 1st April-2016 to 31st December-2020.
Cabinet sanctioned the second tranche of assistance proposed to be given to small traders and business establishments who have been given start up incentive with turn over upto Rs 10 Lac.
This interest subvention assistance also extends to such affected business units having existing linkage with the banks but may have not availed the Special Rehabilitation Package as approved by SLBC in its meeting held on 23rd September- 2014 and also do not figure in the list of units identified by the concerned Divisional Commissioners.
To ensure proper implementation of the interest subvention assistance scheme, Cabinet ordered constitution of a High Level Coordination Committee headed by Chief Secretary and comprising representatives of Relief & Rehabilitation department, Finance department, Planning & Development department, Industries & Commerce department, J&K Bank (SLBC) and or any other appropriate agency.
The Committee shall meet on monthly basis and ensure that only genuine traders/self employed business units have been covered by the banks under the scheme, ensure proper end utilization of the released assistance, consider mid course corrections/changes in the modalities of implementation based on feedback from relevant stakeholders and take proper action to redress grievances of traders /business units.
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