8 Facts about the Governor’s Decision to Treat J&K Bank as PSU
         Date: 30-Nov-2018



Governor of Jammu and Kashmir took a decision to treat Jammu and Kashmir Bank as PSU and subsequently the leaders of three main political parties of the Kashmir Valley started making uproar on it. The decision of the Governor was clearly showing that he was willing to bring more transparency and accountability, which any democratic government emulate for, in the functioning of the Bank. But it is difficult to understand how the present move attacks on the autonomy of the state, an allegation made by the political brass from Kashmir. In order to understand it the important points are highlighted below:
1. Decision of the State Administrative Council (SAC), currently led by the Governor, to treat Jammu and Kashmir Bank as PSU sent jitters among the political parties. The major political parties from valley viz. People’s Democratic Party, National Conference and People’s Conference opposed the decision of the Governor. The political parties in Kashmir started clamoring that the present move will threaten the autonomy of the state.
2. The State Government holds 59.3% in Jammu and Kashmir Bank yet it is a Private Sector Bank. The Bank which has hitherto been categorized as the ‘old private sector bank’ was under the supervision of Reserve Bank of India (RBI) and subject to the oversight of CAG.
3. There were complaints that the bank was not responding to RBI queries on time, and its internal checks and balances had weakened. A Rs 3-crore fine slapped by RBI on the Bank this year, for non-compliance with its directions on Income Recognition and Asset Classification norms and Know Your Customer/ Anti-Money Laundering norms. On earlier occasion also the financial irregularities were found in the Bank and Jammu and Kashmir State Consumer Disputes Redressal Commission imposed a penalty of Rs 15 lakhs.
4. Bad loans had risen in the last few years, from Rs 2,746 crore (6% of total advances) in 2014-15 to Rs 6,232 crore (10%) as on December 31, 2017.
5. The irregularities in appointments have been flashed this year. It was alleged that the appointments were made without notifying the advertisements for the posts or following the formal recruitment process. The Governor of J&K revealed that the PDP-BJP Government changed the complete selection list of 582 candidates in Jammu and Kashmir Bank in order to appoint their own political workers. It was alleged that the ruling MLAs and Ministers in Jammu and Kashmir have appointed their own party workers and Rs 4-5 lakhs bribery was also given by some of the prospective candidates.
6. The Jammu and Kashmir Bank has become the matter mockery and it is essential that the transparency and accountability should be instilled in it. Bankers hold position of trust and the present decision will be helpful in instilling the trust among the people who have invested their money in the Bank.
7. The present move will only make the Bank accountable to the state legislature and bring it within the purview of J&K RTI Act and the Central Vigilance Commission. RTI Act, 2009 of Jammu and Kashmir allows only to the Permanent Resident Certificate (PRC) holders of the state to seek information under this Act.
8. The present decision will help in checking monopoly and reduce political interference, increase financial accessibility and awareness and improved regulation.