“Rs 1,00000 Crore business”, this self-speaking hoarding in the premises of Jammu and Kashmir Bank’s zonal office on Moulana Azad Road stands out in the business highlights of the state. Being a banker to the state government, J&K Bank has a unique position as it even bails out the state, which otherwise has a veritable control over it. During over past 16 years, JKB has the distinction of not getting any bad press, at least within the confines of the state.

The reason was simple. Even the media houses have been at the mercy of the Bank to further their prospects in the industry. Like any other business house in Jammu and Kashmir, it has been easy for the media owners to knock at the doors of the Bank for loans and also looking at this giant institution for a support in the shape of advertisements.

Even if the Bank would face resistance within the four walls of its magnificent headquarters in the heart of Srinagar, the media managers had not to put any extra effort to black it out from rest of the world. The thumb rule for media was self-censorship as far as the JKB is concerned. JKB made spectacular achievement under the dynamic leadership of Mohammad Yousuf Khan, whom the then Chief Minister Farooq Abdullah handpicked to save its sinking boat. Otherwise it was a forgotten institution, like any other public undertaking, dumped in the dingy and unkempt Zum Zum Building in Rambagh.

Notwithstanding the fact that in early 90’s, the armed groups asked people to withdraw the money from Indian banks and deposit in JKB, it did not make a mark, mainly due to disturbances that tore apart the concept of institutions in Kashmir. It lacked leadership and was thus reduced to any another government department.  But with Khan, apparently not having a magic wand in his hand, changed its face and it soon became the most reliable benchmark for how a progressive institution can come up in the state.

Khan not only took the Bank’s business to new heights but he also changed the outlook of its employees and gave them recognition and created assets worth crores of rupees. He too was accused of working for the ruling party at that time, but the way he made JKB to achieve stupendous growth, every other view was ignored. People in Jammu and Kashmir proudly related themselves with the Bank as it started shining as one of the fastest growing banks in north India.

One can easily compare of how the Bank had performed from its inception in 1938 to 1997 and where it stands today. For example, in 1997 its deposits stood at Rs 3658 crores as against Rs 64000 crores as on March 31, 2013. Similarly, the advances stood at Rs 1700 crores in 1997 and now have touched a whopping mark of Rs 39200 crores. Similarly, its business turnover was Rs 5352 crores in 1997 and now it is an unbelievable Rs one lakh crores. So the foundation that had been laid starting 1997 and then carried forward under the capable leadership of distinguished economist Haseeb Drabu is so strong that it could hardly be hit back unless the current state of quality reduction is allowed to go on.  Drabu had envisioned an ambitious strategic plan for the Bank soon after he took over as its Chairman in 2004 but the insiders insist that the plan has taken a back seat and no effort was made to realize that “dream”.

Coming back to why JKB is in news for bad reasons. For the second time in past over two years, the Bank made recruitments for the higher available positions in the management viz Relationship Executives earlier known as Probationary Officers. The PO’s are considered to be the backbone of the Bank as they are leaders who would lead it in future. The way the recruitment of 1050 RE’s took place in a hush-hush manner, without making public as to who was selected and how, JKB perhaps is the only organization in India that concealed the final selection list from the public and sent individual appointment letters to candidates. This even does not happen in UPSC, which selects the people for elite services such as IAS, IPS and IFS, nor does any other Bank do it this way. On the face of it, there may not be any irregularity in the selection process, but by not making it public it has raised questions. That is why the theories about a particular way of selection to benefit the MLAs or political workers are making rounds thus making it appear a fishy exercise. JKB officials have refuted the allegations, but it does not close the chapter there only.

The way the recruitment process has taken place in JKB for last over two years, it also speaks about the deterioration that is being witnessed within the Bank, where the hierarchy is not given the rightful place in making the decisions. If the sources are to be believed, decisions on crucial issues are motivated and are being taken keeping in view a particular interest. A particular lobby of young businessmen, which pretends to be close to the corridors of power, is believed to be calling the shots as to who should be benefited and who should not. This has surely dented the image of the Bank, which is supposed to be the symbol of success, progress and transparency.

While the Bank’s strength is deeply rooted within the state, for quite some time now it has been digressing from the role it ought to play for the people of J&K. The Credit-Deposit-Ratio (CDR) has drastically come down and as of now only 39 percent of lending takes place in the state while 61 percent is doled out to outside J&K. There is variance in interest rate as well.  It is 14 percent for within the state and roughly 10 percent outside.  Obviously the Bank earns highest margin of 6 percent from its own people. More than 64 percent deposits come from within the state. Moreover, the state government employees, whose salaries are routed through JKB, are the biggest support to its deposit base with roughly Rs 6000 crores getting into its kitty from them.

The question is not that JKB is fast losing its ground, but in case the skeletons just like the one in case of recruitments start tumbling out of the cupboard, it will surely determine a downfall in the overall index of its reliability. The failure in not following the systems and procedures is also a cause of concern for those who look towards JKB as symbol of success. One should keep in mind that private banks such as HDFC have already made strong inroads in J&K. Other private banks are following the suit. Not that the doors can be shut on others, but it could be seen as a beginning of an alternative, in case JKB continues to be slumber. A strategy document of JKB formulated few years back had also cautioned about this reality: “In the emerging competitive scenario Jammu and Kashmir Bank runs the risk of getting marginalized”.  That is why, the document suggested, that the difference can be made by having approach of “single-minded dedication towards Jammu and Kashmir”.

Making the business more transparent, adopting the system and mechanism that has ensured its success so far, is the only way to save this only credible institution the state can boast of. Interferences have always proved fatal to such institutions and government would be doing service by desisting from such an approach.

By arrangment with Rising Kashmir