Govt to pay back Rs 2,300 cr to J&K Bank soon: Rather

JAMMU: The state government that has overdrawn Rs 2,300 crores from the Jammu and Kashmir bank today said it would soon repay the amount to the public lender.

"The outstanding overdraft (OD) amount of Rs 2,300 crores would be paid to J&K Bank very soon. The liability... will be wiped out in one go with the help of union finance ministry in accordance with the recommendations of the 13th Finance Commission," Finance Minister Abdul Rahim Rather said here.

Rather was today replying to a discussion on the budget, presented by him on March 7 in Legislative Assembly.

While thanking the 13th Finance Commission for coming to the rescue of the state government by agreeing to provide one time grant to wipe out the outstanding Overdraft (OD) amount, he said state government's advance arrangement with the RBI was a win-win situation for all.

The minister added, the OD facility for the state government would be revived and the government can avail Wage and Mean Advance in the time of need from RBI through J&K Bank.

Further, Rather said, the arrangement with RBI will help the state government save around Rs 230 crore annually as earlier it had to pay the amount as interest on the outstanding OD. The amount will be used in the public welfare scheme, he added.

The state finance minister said that Jammu and Kashmir Government's ties with the J&K Bank. "So far we have repaid to J&K Bank Rs 1000 crores as one time assistance from the Centre and would shortly start from a clean state," he added.