KCC&I opposes SAC decision to treat JK Bank as PSU

KCC&I opposes SAC decision to treat JK Bank as PSU
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SRINAGAR: Opposing the State Administrative Council (SAC) decision to bring J&K Bank under the purview of RTI, CVC and the legislature, the Kashmir Chamber of Commerce and Industry (KCC&I) on Monday demanded the bank’s status be restored as it was on 22 November 2018.
KCC&I in a statement said if any improvement in the J&K Bank is required it can be discussed with stakeholders.
J&K Bank cannot be treated as any other Public Sector Undertaking (PSU) as it is a public listed company and also governed under banking laws, it said.
“The decision is being seen as unwarranted interference in the functioning of the bank. It is because of the autonomy the bank enjoyed since its inception that it has attained present level and become an important component in the existing economic structure of the state,” it said.
“Reportedly more than 50,000 shareholders have stakes in the bank. Government is only one of the shareholders with only 59.3 percent shareholding. In the strict sense, it is not a department of the government nor is (it) owned by the government. It is not even substantially financed by the government; instead, the government receives heavy dividends from the bank,” the chamber said. “The people of the state have a vested interest in the functioning of the bank. More than 90 percent of our members are connected with the bank in one form or the other.”
KCC&I added, “Our State has seen so many governors in the last seventy years. The state has been brought under Governor’s rule eleven times, not a single governor tinkered with the functioning of the bank. It is for the first time that the bank had to engage additionally 582 banking associates when they were not needed as per the requirements. Reportedly, not a single case was filed against the bank questioning recruitments made by it. But for the intervention of the executive head, more people came to be engaged increasing the bank’s avoidable expenditure.”
The engagement of our unemployed youth cannot be resolved by providing them services in the bank, KCC&I said. “Reportedly, architects, graduates, post graduates and other professionals have been engaged for rendering banking services, when their services could have been better utilised in the concerned departments of the government. It appears that failure of the government to provide employment to our educated unemployed youth is sought to be shifted to a semi-private bank,” it said.
“It further appears that since the bank has done well because of the credibility and support it enjoys in the people as an institution, the decision was taken to bring down this institution to a level of PSU of the government. Is the intention to cause failure of the bank at the cost of our people who depend for their livelihood on the assistance rendered by the Bank?” KCC&I asked.
The chamber said the J&K Bank has over a period of time become synonymous with the identity of the people of the state and occupies a special sentimental place in their hearts.
They consider it as their own bank. The people and the government under the existing scenario are not on the same page. The people look upon the bank for financial help. Since it is now a PSU, people needing help will have to follow cumbersome red tapism and seek clearances from bureaucracy and/or ministry. The CEO of the Bank is reduced to a Managing Director of the Company, it said.
So far as the position of non-performing assets (NPAs) is concerned, there is evidence to show that the people in the state repay the loans they borrow from the bank. It is only few persons holding political power who can be counted, amongst others, major defaulters. It will be difficult for the bank to proceed against such defaulters because they are the ones who have a say in the government, the chamber said.
The KCC&I views the whole issue in the context of J&K Bank as an institution.
“Till date, if the bank has done well as is evident from its records available in public domain, its management being efficient evident from the share value of the bank in the stock market and above all people of the state, in particular members of the trade community being satisfied, no reason much less a credible reason is seen in declaring the bank, under sunset orders, as PSU, bringing it within RTI and CVC when such issues are pending before the high courts,” it said.
As a consequence of these decisions, the image of the J&K Bank has been tarnished which could be catastrophic for any financial institution, its shareholders and those doing business with it, the KCC&I said.
“The KCC&I has been on record to express its concern at the losses to our economy being caused by the lack of accountability in the state owned Public Sector Undertakings. A conservative estimate shows the current liabilities of these PSUs to be upwards of Rs 10,000 crore. In addition, the locking up of resources in the shape of infrastructure, land, manpower and potential has a consolidated negative impact – primary and consequential – running into lakhs of crores. Audits have not been conducted since decades and mandatory board meetings are not being convened over years causing huge losses.”
“There are no two opinions that the bank needs to be run by professionals and in a manner which inspires investor confidence. The government has, by its decision, and subsequent explanation of its decision, failed to convince the general public and the business community about its intentions.”
KCC&I said the statement given by the government spokesperson “gives the impression that the decision was only aimed at promoting good governance and transparency in the functioning of the bank”.
“Other statements have emanated from the Prime Minister’s Office. These statements betray the intentions of the decision-maker and dissemble public minds. Real motives are writ large,” it said.
The KCC&I has urged the Governor to withdraw the decisions taken on the 22 November 2018 relating to J&K Bank.