The idea that banks in Jammu and Kashmir should “intervene” to revive a wounded economy sounds constructive, even reasonable. But over the years, we have seen that banks have not merely watched the decline of Kashmir’s economic life; they have been active instruments in a system that extracts local wealth, rewards outside players, and punishes entrepreneurs.
Kashmir’s economic journey over the past three decades has been a constant swing between collapse, fragile revival, and collapse again.
Businesses scarred by the turmoil of the 1990s struggled to recover as industry and tourism slid towards bankruptcy. From 2010 onwards, each wave of unrest brought fresh losses and rising non-performing assets that bankers treated as individual failures instead of acknowledging the political disruptions that caused them.
Then came 2019. Article 370 was dismantled, communication snapped, administration rewired, and the economy staggered to a standstill. Before recovery could begin, COVID-19 tightened the noose further.
In each cycle, Kashmiris rebuilt from ruin. In each cycle, institutions turned away.
The narrative around Kashmir’s non-performing assets is one of the most harmful distortions.
Much of this debt was not the product of mismanagement or risk-taking. It was the result of curfews, sieges, communication blackouts, and forced shutdowns. No business anywhere could endure such conditions.
Yet banks continue to treat these losses as ordinary defaults, staining the credit history of entrepreneurs who were victims of circumstances beyond their control.
Government relief schemes have been announced repeatedly, often with elaborate language and sizeable numbers attached. On the ground, they translated to little more than paperwork and press statements. The truth is that debt generated by conflict is a national responsibility.
The only fair approach is to acknowledge its political origins, restructure loans collectively, and partially write off conflict-inflicted liabilities. Anything less is continued injustice masked as financial policy.
A particularly damaging pattern has emerged in export financing. National rules allow credit against confirmed export orders, yet Kashmiri exporters are frequently forced to produce heavy collateral.
Before 2019, the very same banks extended non-collateral support to non-locals who later became major players in the carpet sector. The contrast is stark. Outsiders receive trust and flexibility. Kashmiris face suspicion and inflexibility. This is not risk management. It is institutional bias rooted in power imbalance.
The same logic applies to the handicraft sector, which remains central to Kashmir’s identity and foreign exchange earnings.
During my tenure as President of the Kashmir Chamber of Commerce and Industry between 2006 and 2009, we designed a dedicated Handicraft Finance Model with the J&K Bank, tailored specifically to the needs of artisans and exporters. It was showcased prominently at the time, yet today, few can say with certainty whether it is functional, funded, or quietly shelved. Kashmir has never lacked ideas. It has lacked institutional honesty.
The apple industry illustrates the problem most clearly. Despite being the backbone of Kashmir’s economy, it has suffered from decades of inadequate and untimely credit. Banks have never created a reliable, horticulture-specific financing stream.
As a result, growers turn to outside traders for advance payments, losing negotiating power long before harvest. Pricing, logistics, warehousing, and markets fall into the hands of external players. Wealth generated in Kashmir leaves Kashmir.
This is an engineered dependency, not market behaviour.
After August 2019, when businesses were suffocating under communication shutdowns and trade restrictions, one might have expected a compassionate financial response. Instead, banks tightened lending, increased collateral demands, accelerated NPA tagging, and moved credit portfolios outside the region where returns were easier and politics less complicated. In Kashmir’s worst economic hour, institutions withdrew.
In practice, banks in Kashmir have reinforced dependency on outside capital, drained local savings, weakened entrepreneurship, and treated conflict-created defaults as moral failure. Calls for “intervention” sound noble only to those who have not lived this reality. Institutions cannot revive what they have spent decades undermining.
If banks truly wish to support recovery, certain steps are unavoidable.
They must recognise conflict-induced NPAs as political debt and restructure them under a special relief framework spanning 1990 to the present.
Export financing must follow national rules and not hinge unfairly on collateral.
The handicraft model requires full reinstatement and transparent oversight.
A dedicated financing pipeline for horticulture, particularly apples, is long overdue. Sector-wise lending data should be publicly disclosed so that bias is visible rather than whispered about. Above all, banks must reinvest Kashmir’s deposits in Kashmir.
The Kashmiri entrepreneur has shown resilience that many economies would not survive.
What we lack is not ability or innovation, but institutions willing to repair the harm they helped create. Economic stability cannot be built on denial. It must begin with truth and move through justice.
If banks wish to be part of the solution, they must first acknowledge their part in the problem.
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