Srinagar: Jammu & Kashmir Bank is the major financial institution in the union territory and is banked upon by the business sectors of the valley. The institution, which once was one of the fastest growing private sector banks in India, is lately trying to fix its numbers and get back on the track amid a global wave of recession due to the pandemic. Riding on a fresh extension to his term, Chairman and Managing Director Rajesh Kumar Chhibber shared his vision and thoughts with The Kashmir Monitor senior reporter Firdous Hassan. Here are the excerpts from the interview:

KM: You have recently been given a six-month extension as the CMD of J&K Bank from RBI. What would be your focus during this period?

JKB CMD: The RBI has extended my tenure as the CMD of this great institution, for which, I feel happy as well as humbled.

We, as a bank, have faced, and, so far, braved unprecedented disturbance and disruption of business during the last five quarters. Just after emerging out of the interruptions caused after the August 2019, the Covid-19 brought the life on the entire planet to a grinding halt this year.

However, in economic terms, we have progressed from the containment phase to revival stage. Therefore, our focus has been directed to all our financial momentum backed by our institutional energy towards the revival of J&K economy.

In this regard, we are also working closely in coordination with the J&K Government towards implementation of the relief package recently announced for revival of business by the Hon’ble LG Manoj Sinha.

We have also put in place a mechanism to ensure grant of hassle-free credit facilities besides counseling and hand-holding the youth and women entrepreneurs to achieve the desired objectives envisaged under the package announced by the J&K Government. We as an institution shall remain at the forefront to extend every possible support to make the government’s extremely important economic package a successful endeavour.

While doing all this, we shall ensure that best customer services are extended at all delivery points to our customers in addition to the aspiring entrepreneurs irrespective of gender, status, or location.

KM: Considering the high NPAs of the past and other issues the institution was facing, how is the health of J&K Bank at present and what can we expect in the near future?

JKB CMD: It is good question.

The term ‘health’ is an apt one to understand the current position of the bank. Profitability and growth are the indicators more relevant during the normal functioning of economy.

Let’s turn to the facts now. We have strengthened our balance sheet for the past few quarters. our net NPA was just 3.05 % as on 30th June 2020 as against 4.65 % recorded on June 30, 2018. Due to increased provisioning, our NPA Coverage ratio is one of the highest in the industry at 80.93 % as on 30 June 2020 as against 66.78 % recorded two years ago. Our NIM is 3.56% and our cost of deposits has come down to 4.39 %.

If you see these figures within the backdrop of two consecutive disruptions, you will yourself conclude that J&K Bank has pulled through it too well and, as of now, is much healthier and safer than it was a couple of years ago.

This has not happened by itself. It has been our relentless effort at the bank to clean and consolidate the balance sheet to set a right trajectory for our future growth. We firmly believe that with the unflinching support of our promoters, especially the J&K Government, people of J&K and our customers spread across the country, the bank will grow stronger and will serve the people more efficiently.

KM: Recently, the Jammu and Kashmir government accorded formal sanction for interest subvention of 5% in case of all borrowers. However, people are still confused about it. Can you throw some light on it and when it will be implemented?

JKB CMD: You are right. The government has accorded formal sanction for interest subvention of 5% in case of all borrowers for a period of six months with effect from April 1, 2020; excluding the borrowers under KCC, ACC, loan against deposits, personal loans and NBFCs. The borrower accounts should be standard as on July 31, 2019 or March 31, 2020 (whichever is applicable) to be eligible for availing this benefit. In terms of volume, the J&K Government has earmarked Rs 950 Cr, out of the total package of Rs 1,350Cr for this purpose only.

Let me tell you that the interest subvention of 5% is a historic decision and matches the unprecedented context of ongoing global pandemic in which it has been announced. Here I would like to extend gratitude to the J&K Government for coming up with such a timely and tall-order package to ease out the financial stress of the borrowers due to the pandemic. Another major decision taken by the J&K Government is to release pending interest subvention claim of Rs 140 Cr under the 2014 and 2016 rehabilitation schemes granted to the borrowers. This decision shall further lessen the hardships of the business community. 

On ground, it means that borrowers who were incapacitated by the recent disruptions to pay interest on their loans, it’s a shot in their arm to revive their businesses by effectively managing their liabilities and for the banking industry in the region, it’s a boon as it will enable the banks to mitigate their asset quality risk due to COVID-19 fall-out.        

Being the leading player in the economic ecosystem of J&K, the business community shall receive a major portion of the interest subvention through J&K Bank itself that would go a long way in strengthen the confidence of the customers.

KM: J&K Bank is a premier financial institution, and small and large businesses bank on it. Does it have any specific plans for assisting the local businesses?

JKB CMD: As a financial institution of systemic significance to this region, our entire business policy is geared towards the growth and development of local businesses irrespective of their size and location.

In fact, we conducted a series of deliberations and discussions with all the stakeholders involved in the businesses across J&K UT to understand their difficulties and requirements due to the pandemic and have come up with sector-specific tailor-made products to provide hassle-free finances to our customers at large and to the deserving youth and women entrepreneurs in particular. 

Relief packages announced by the central government under its Atmanirbhar Bharat Abhiyaan in the wake of Covid-19 have been promptly passed by us to our customers as per the guiding frameworks of the government. Beginning with the moratorium in loan repayments to providing financial support under Guaranteed Emergency Credit Line (GECL), we have remained at the fore front of implementation process in the region in addition to introducing tailor-made products to provide the requisite liquidity to the businesses in the J&K UT. The bank has so far disbursed Rs 1680.77 Cr among 47,058 beneficiaries across the country under GECL scheme only. Out of these Rs 1387.40 Cr have been disbursed among 44,060 beneficiaries in J&K UT alone. 

KM: What would be your messages for investors and for entrepreneurs?

JKB CMD: As far as I have seen, our investors know us very well and are familiar with our legacy that spans over more than eight decades. However, I would like to assure them that the bank, backed by its wealth of decades-long experience and under the keen supervision of its dynamic Board-of-Directors, is strategizing hard to enhance its financial performance and leverage its uniqueness. We are also working upon business model to make it more effective and well-suited to our market requirements. Therefore, I would request them to not only remain invested with us but also to increase their investments.

My message to entrepreneurs is that they need to come forward with their ideas and proposals and contact our Nodal Officers directly or through their local government representatives. We are here to counsel, finance, and handhold them irrespective of their status, location, or gender.  

KM: What about J&K Bank’s role in UT Government’s Back to Village program Phase-3?

JKB CMD:  During the recent B2V Program, our bank has established Special Desks for youth and women entrepreneurs to provide them necessary assistance and guidance in seeking financial support from the Bank. We have so far received 12908 proposals seeking credit assistance from the Bank out of which 7670 cases have been sanctioned amounting to Rs 135.23 Cr. Out of total received cases, more than 3051 proposals have been received from women entrepreneurs.

KM: Any update on recruitments?

JKB CMD:  Due to the ongoing pandemic, the process of recruitment got delayed but now with situation easing out, we shall soon be conducting recruitment exams through IBPS.

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About the Author

Self-help believer, a gadget lover and nature's admirer.
Presently Senior reporter at The Kashmir Monitor with an experience of nine years in reporting business, crime, defense, politics and environment.Have also contributed to reputed media organizations including First Post, India Spend, Forbes India

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