J&K Government Defends Sacking Of J&K Bank Chairman, Says Will Protect It
Jammu and Kashmir sacked J&K Bank chairman Parvez Ahmad after RBI flagged governance issues at the lender. (Source: PTI)

J&K Government Defends Sacking Of J&K Bank Chairman, Says Will Protect It


Defending the sacking of Jammu & Kashmir Bank Ltd. chairman Parvez Ahmad, the state government on Wednesday said that it would protect J&K Bank and work towards making it an internationally renowned bank.

"I am saying this with full authority of the governor (Satya Pal Malik) that J&K Bank will be protected, it will be made a shining bank. It will be run by people of Jammu and Kashmir. We are interested that it becomes an internationally renowned bank. It should get branches all over the world—London, Singapore, Dubai, etc.," J&K chief secretary BVR Subrahmanyam said in Srinagar. He was responding to questions about the sacking of Ahmad by the government last week.

"Please wait for three months and you will see results flowing out of J&K Bank," he said.

The chief secretary said the government did not act against the bank.

"The RBI gave us a letter saying that we are extremely concerned about governance issues in J&K Bank. These issues have been pending in spite of repeated requests of RBI and therefore we were forced to remove the CMD," Subrahmanyam said.

Subrahmanyam said an interim chairman and managing director from the hierarchy of the bank has been appointed. A full-time chairman and managing director will be finalised by a search committee, which will be formed soon.

"The J&K Bank is the shining crown of this state. Therefore, it is important that this bank regains its glory. You have heard about the ACB raids. There were some old complaints about irregularities and appointments. It is not about the appointments that the governor talked about. They were boys and girls who qualified an exam and were in waiting list. They were then appointed," said Subrahmanyam.

The chief secretary said J&K Bank has a registry and it was known to all on whose recommendations people were being appointed in the bank.

"There are written papers which say bring a recommendation and you will get the job. It was called Corporate Social Responsibility. How can you appoint people under CSR in a bank? It can be done in a government,” Subrahmanyam said.

“A bank is not fundamentally an employment agency. A bank is first and foremost a bank. A bank is the custodian of people's money and government money. Primary responsibility of the bank is to take care of the money.

“It is not a charitable institution, it is a misnomer. That is the fundamental objective from which J&K Bank had moved away," he said.

According to Subrahmanyam, the bank was splurging money under CSR on golf courses while the state government had to give a capital subsidy to it only last year.

"J&K Bank has spent Rs 50 crore under CSR on golf courses. My government gave it (J&K Bank) Rs 500 crore last year as capital subsidy. A bank which requires government money to remain operational, does it have business to spend Rs 50 crore on golf courses where less than a 1,000 people play?

“That is an elite sport. It is unacceptable for a bank. If the bank had a Rs 2,000 crore profit, no question. It is living on government money," the chief secretary said.

On bringing the bank under the Right to Information Act, Subrahmanyam said J&K Bank has no choice but to be under RTI as it is a government-owned bank.

"It is registered under the Companies Act as a government company. By the end of June, the bank will be brought under RTI and CVC guidelines," he added.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.