Srinagar: The Jammu and Kashmir Bank has figured in the national auditor’s report for its worsening financial health, inefficient system, and irregularities in recruitment process.
According to the Comptroller and Auditor General (CAG), the bank’s profit has dropped by 500 percent in the last five years.
“The profit earned by the bank declined from Rs 1,182.47 crore in 2013-14 to 202.72 crore in 2017-18,” the report says.
Holding the bank’s failed credit control and financial reporting system responsible, the report says that the bank has been unable to identify its growing Non Performing Assets (NPA) on time.
“This is mainly due to an increase in the Gross Non-Performing Assets (NPAs) of the bank from Rs 643.77 crore, as on 31 March 2013 to Rs 6,006.70 crore as on 31 March 2018,” reads the report.
“The percentage of NPAs to gross advances also increased from 1.62 percent at the end of March 2013 to 9.96 percent at the end of March 2018. The bank also suffered a loss of Rs 1,632.29 crore during 2016-17,” the report says.
“Sanction/release of credit facilities, without safeguarding the bank’s interest through adequate security cover, proper credit appraisal, adherence to the pre or post-disbursement conditions of the sanctions, regular monitoring, etc. not only led to NPAs but also loss/ non-recovery of Rs 197.98 crore, doubtful recovery of Rs 1,599.14 crore, and excess payment of Rs 14.10 crore in test-checked cases,” the CAG has found.
The bank, as per the report, has also not even adhered to the regulations of Securities and Exchange Board of India (SEBI).
The Information Technology systems set up in the bank are also not functioning at optimum, preventing the bank form taking informed decisions, the CAG report says.
Recruitment of Relationship Executives and Banking Associates during the period was also replete with faults and errors. As per the report, the bank prepared district-wise merit list of 3,107 candidates, but this district-wise recruitment was not mentioned in the advertisements.
The CAG has noted that the preparation of merit list on district-wise basis was a decision taken by the bank chairman without the approval of the BODs.
There was also hue and cry over the recruitment process, forcing the authorities to cancel the entire process.
The bank’s annual growth of deposits during the last four years ending March 2017 was also far below the national average of scheduled commercial banks, the report notes.

Junaid Nabi Bazaz