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| Chairman rebuffs stressed loans | | 'Report washes Bank's dirty linen in public' | | Abodh Sharma
Jammu, June 1: A day after Chairman Jammu and Kashmir Bank trashed media reports that the bank was reeling under huge stressed loans; the report has inadvertently brought the fundamentals of the bank and the manner in which it is being governed under sharp scanner.
The questions are being raised on the directors of the bank, most of whom have no banking background and in fact have managed the nominations to the board of directors due to their proximity to the ruling National Conference or the Chief Minister himself.
A top officer of the bank pleading anonymity said that besides the Finance Commissioner to the Government and the RBI representative who are on the Board by virtue of their posts, at least two members of the existing board belonging to Valley have managed to walk in every time the NC Government came to power. "Besides these two, who are close to the ruling dispensation, and have been on the board for 25 years, the other three including a CA and two industrialist, one from J&K and other from Mumbai are reported to be close to the Chief Minister," the officer disclosed adding that leaving aside the Jammu based industrialist, who commands respect of the bank, the other members of the Board have done little for the cause of the bank and its employees. "They have only become liaison officers for the corporate borrowers," he added further.
It is interesting to note that Jammu and Kashmir bank which projects itself as the bank of the people of Jammu and Kashmir, lends advances to the locals @ 14.25- 15.25 percent as its enjoys monopoly here while outside the state, it becomes competitive and most corporate loans are offered @ 9 percent.
"I call it anti people banking as loyal customers of the state who hold salary, saving and current accounts in the bank have to borrow at far higher rates of interest as corporate houses outside the state are offered loans at far lesser rate," another senior retired officer said adding, "most of the corporate loans which are extended at competitive rates on the recommendations of the directors turn bad, affecting the financial health of the bank".
Meanwhile, the Chairman of the bank, Mushtaq Ahmad, who is serving his second term, confessed that the bank had stressed assets in the range of Rs 500-700 crore, he confirmed that the NPA figure of the bank was Rs 783 crore, and the same was audited by multiple auditing firms. |
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