A Trillion Crore Story

The J&K Bank will celebrate its platinum jubilee in 2013 and for that it is scripting a huge story, TASAVUR MUSHTAQ reports

Scripting a big growth story for its platinum jubilee in 2013, J&K Bank is working towards achieving a trillion crore business cumulative turnover target and a profit of Rs 1000 crore. The small bank that was started way back in 1938 today is among the league of top banks in the country with tag of being regional in origin, national in operation and international in standards.

Notwithstanding economic uncertainties and concerns, the bank delivered consistent growth in business, volumes, revenues and profits. The year ending March 2012 is also witness to growth and success; this was revealed in recently held 74th Annual General Meeting (AGM) of the state’s first listed company. Blending the success story so far with the target to hit in future, the theme of AGM was “Expanding Frontiers, Consolidating Capabilities and Sustaining Growth”.

J&K Bank CEO
J&K Bank CEO- Mushtaq Ahamed

“The bank is poised to open new chapters, new hopes and new opportunities for the people of state particularly youth,” Chairman and CEO Mushtaq Ahmad told shareholders at the AGM. “We have a set plan of growth and expansion and we are implementing it.”

Appreciating the constructive role of shareholders, the board approved the payment of record high dividend of 335% to the Bank’s share holders.

Aiming high, the bank with state government as majority shareholder has already achieved a business turnover of Rs 86432 crore. The net profit pocketed by bank in March 2012 was Rs 803.25 crore, the highest ever posted by the Bank in its history.

“This is despite the economic uncertainties and concerns the world over as also in the country that our Bank delivered another year of consistent growth. Our core business growth is testament to our unique value proposition and a clear upward trend across business volumes, revenues and profits, surpassing all previous achievements,” said Mushtaq while sharing his delight with shareholders.

The net worth of the bank increased to Rs 4,093.18 crore on 31st march 2012, from Rs. 3,478.68 crore on 31st march 2011.

The figures would have much better, had not the state government entered into a tripartite agreement with the RBI and the Union Finance Ministry under which the RBI took over as the debt banker of the J&K government in lieu of state government getting a one-time Rs 1000 crore grant to manage its overdraft. But it helped bank to prove the allegations wrong that it was earning out of the government business.

Though there is downgrade in the relationship with the government, the bank’s grip over the market sill in the state is next to none. “This is despite the fact that we only own 33% of the overall banking network in the state,” Mushtaq told reporters on the sidelines of the function. “We believe good banking requires a higher level of commitment and that is what is paying us.”

But to reach Rs 100 thousand business, the bank has its script ready. Its focus shall remain at the home turf because it understands the local market and can service it much better a compared to the non-J&K network that will remain special branches.  Mushtaq told the AGM that in near future 70% of the overall branch network would be within J&K.

The Bank has identified areas of focused attention so that the growth story is achieved well. Take the case of apple and Kashmir produces 77% of the total apples that India produces in a year. Under the Apple project, J&K Bank sees triggering around one lakh crore revenue by the end of current fiscal. In the first quarter, its chairman told the AGM the bank has sanctioned Rs 85.83 crore advances to the apple sector and Rs 67.89 crore was actually disbursed.

Not only new policies of lending are implemented, the bank continues with its policy of expanding  network across the state and beyond. The Bank has added 55 new Business Units (B.U) and 147 ATMs during the FY 2011-12, which shot up the number of B.Us to 603 and ATMs to 508.

Mushtaq informed that during 2012-13 around 100 new Business Units and 200 ATMs will be dedicated to people mainly in unbanked and under-banked rural areas of the State. The bank is planning to recruit few more hundred youth this year. Last year bank employed nearly 1500 youth as banking associates.

The board meeting also approved the re-appointment of Mohammad Ibrahim Shahdad and Vikrant Kuthiala as directors of board.


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