Deposits crossed Rs 2.16 lakh crore and advances Rs 1.32 lakh crore in FY 2025-26, yet Jammu and Kashmir Bank’s own lending market share has slipped many points since 2019, even as its deposit base has stagnated, writes Masood Hussain
Money kept flowing into Jammu and Kashmir’s bank branches through 2025-26, even as the region’s appetite for borrowing it back stayed cautious. By the close of the financial year on March 31, 2026, the banking system sat on deposits of Rs 2,16,352 crore, up 9.84 per cent from Rs 1,96,968 crore a year earlier. Advances rose almost in step, climbing 9.86 per cent from Rs 1,20,424 crore to Rs 1,32,296 crore. Total banking business touched Rs 3,48,648 crore, a growth of 9.85 per cent.
The numbers look healthy until set against the national picture: deposits grew nationally by 13.40 per cent and advances by 16 per cent, both comfortably ahead of Jammu and Kashmir’s pace. The gap is not new, but it keeps widening quietly while local headlines celebrate the absolute growth.
The credit deposit ratio, the number bankers and bureaucrats watch most closely, barely moved, from 61.14 per cent in March 2025 to 61.15 per cent in March 2026. Against the national average of 81.71 per cent, Jammu and Kashmir remains a saving economy rather than a borrowing one.
Bank Network
The physical footprint of banking has been reshaping itself for years, and the pace picked up sharply after 2024. Brick and mortar branches grew from 2,008 in March 2021 to 2,222 in March 2026, barely 11 per cent in five years. Banking correspondents and customer service points, by contrast, more than tripled, from 2,810 to 9,481, most of it added in a single year between March 2024 and March 2025.
Put together, total banking touchpoints rose from 4,818 to 11,703. One outlet now serves every 1,048 people, against 2,546 five years ago, and the area each outlet covers has shrunk from 8.77 to 3.61 square kilometres. On paper, financial access has never looked better.
The catch is who is doing the reaching. Correspondents and digital touchpoints are cheaper than branches, and lenders have leaned on them instead of adding counters, particularly in the interior. The Reserve Bank of India is pressing banks to open more physical branches in rural pockets, arguing a phone linked correspondent point does not carry the same confidence as a teller behind a counter.
Branch Geography
This year’s branch data puts a hard number on something bankers and market watchers have argued for years: the competition that arrived after Jammu and Kashmir became a Union Territory in 2019 has settled almost entirely in the cities, leaving the hinterland to JK Bank.
Of JK Bank’s 835 branches, 518, or 62 per cent, sit in rural centres, and just 166, under 20 per cent, sit in urban locations. The ten other private banks operating, HDFC, ICICI, Axis, IndusInd and the rest, run close to the mirror image: 124 of their combined 304 branches, 41 per cent, are urban, against just 83, 27 per cent, in rural areas. The twelve public sector banks follow the same skew, 40 per cent urban against 31 per cent rural. Strip JK Bank and the Grameen Bank out altogether, and the rest of the system runs 40 per cent of its branches in cities and towns, well under a third in the countryside, almost the exact inverse of JK Bank’s own footprint.
None of these entrants carries lead bank responsibility outside two Jammu division districts, so none is obliged to chase the thinner margin business of financing orchards, small towns and remote valleys the way JK Bank is. They have gravitated instead toward government salary accounts, urban retail and business banking in Jammu city, Srinagar and the larger towns, low risk business other Indian markets have long rewarded. JK Bank, carrying the lead bank tag across twelve districts, continues absorbing the cost of rural coverage its newer, more selective competitors have been free to sidestep.
Market Share
The branch data explains where the competition has settled. JK Bank’s own numbers, tracked against the Union Territory’s totals year on year, show what that competition has cost the bank, and the two books have not moved together.
JK Bank’s share of the region’s deposits has held remarkably steady across seven years: 66.14 per cent going into the 2019 transition, dipping only to 63.92 per cent by March 2021, and settling in a narrow 63-64 per cent band since, closing FY 2025-26 at 63.24 per cent. Ordinary depositors have barely moved.
Advances tell a different story. JK Bank’s lending share actually rose after the 2019 transition, from 62.16 per cent to 68.76 per cent by March 2020, the same year its profit collapsed into a loss of Rs 1,139.41 crore on a wave of provisioning and a near halt in NPA recovery, a sign the bank was absorbing stress competitors were, for the moment, avoiding. From that peak, the slide has been almost uninterrupted: 63.91 per cent (2021), 62.21 per cent (2022), 59.50 per cent (2023), 57.54 per cent (2024) and 57 per cent (2025), before ticking up to 58.20 per cent this year, the first improvement in five years.
Read together, this says something sharper than a simple loss of share. JK Bank has not lost its depositors; it has lost ground almost entirely on the lending side, roughly twelve percentage points of advances share surrendered since the 2019-20 peak. That fits the branch geography: competitors content to bank urban salaried and business customers for loans, while leaving deposit collection, the lower margin half of the business, largely uncontested because it comes bundled with a branch network they chose not to build.
Who Gained
Twelve points of advances share did not simply vanish, they went somewhere, though a precise year by year answer is harder to establish than it is for JK Bank itself.
SBI is already the second largest bank in Jammu and Kashmir by business, holding 14.60 per cent against JK Bank’s 61.33 per cent, and runs its book differently. Its credit deposit ratio, 93.28 per cent, the highest of any major lender, sits close to the national average, a sign it lends out almost everything it collects locally. Most tellingly, Rs 6,702.48 crore of SBI’s Rs 24,564.63 crore advances book, 27 per cent of it, is booked separately as Corporate Sector Advances, large ticket lending distinct from retail and priority sector credit. JK Bank’s equivalent line, on a book more than three times the size, is just Rs 1.08 crore; Punjab National Bank’s is Rs 138.25 crore. No other lender comes close to SBI’s scale here.
Deposit Growth
Jammu and Kashmir Bank remains, by a distance, the region’s principal depository. With a 61.33 per cent share of the banking business, its deposits stood at Rs 1,36,831 crore and advances at Rs 76,999 crore, a credit deposit ratio of 56 per cent, lower than the system average.
State Bank of India was a distant second with a 14.60 per cent share, deposits of Rs 26,334 crore and advances of Rs 24,565 crore, but a sharper credit deposit ratio of 93 per cent. HDFC Bank held 5.68 per cent, with deposits of Rs 12,068 crore against advances of Rs 7,743 crore and a ratio of 64 per cent. Punjab National Bank and J&K Grameen Bank followed, each under five per cent.
The pattern across the twenty six institutions is consistent: the giants sit on deposits, while smaller, more aggressive lenders such as HDFC, ICICI and Axis post sharper ratios on modest books. JK Bank’s dominance in deposits has not translated into an equally dominant lending ratio, a gap that shows up again at the district level.
Credit Growth
Total advances outstanding across Jammu and Kashmir closed the year at Rs 1,32,296 crore, driven overwhelmingly by priority sector lending, which grew far faster than commercial credit, a divergence Scheme Strain, below, examines in detail.
The Annual Credit Plan for the year, the target set for banks each April, was comfortably beaten. Against a target of Rs 77,974.29 crore for 19.90 lakh beneficiaries, banks disbursed Rs 84,384.12 crore to 19.37 lakh beneficiaries, an achievement of 108 per cent in financial terms and 97 per cent in physical terms. The previous year had closed at Rs 69,777.77 crore disbursed to 18.44 lakh beneficiaries, so the year on year growth in disbursement stood at 21 per cent.
Split by sector, priority lending disbursed Rs 44,228.30 crore against a target of Rs 43,812.17 crore, 101 per cent achievement; non priority reached Rs 40,155.82 crore against Rs 34,162.12 crore, 118 per cent. J&K Bank alone accounted for 63.41 per cent of priority sector credit disbursed, well ahead of its 38 per cent branch share. HDFC Bank disbursed 12 per cent of priority credit with just a five per cent branch presence, a leaner, more targeted lending machine. Public sector, cooperative and most regional banks lagged their own branch shares by wide margins.
Not every sub sector kept pace: banks achieved just 84 per cent of target in agriculture, 31 per cent in education, 53 per cent in housing and 5 per cent in social infrastructure. Only MSME, renewable energy and a residual “others” category cleared their targets in full.
Some lenders missed their priority sector targets badly: Bandhan Bank achieved just 1 per cent, IndusInd 9 per cent, Federal Bank 13 per cent, Indian Overseas Bank 18 per cent and IDBI Bank 26 per cent. Even the State Bank of India managed only 46 per cent, and J&K Grameen Bank 57 per cent.
District Divide
Twenty districts split the region’s banking business unevenly, and the divide runs along the old Jammu and Kashmir fault line. The ten districts of the Kashmir valley, spread across 1,070 branches, recorded deposits of Rs 84,932 crore and advances of Rs 69,427 crore between them, a regional credit deposit ratio of 81.74 per cent. The ten districts of the Jammu division, served by 1,152 branches, carried deposits of Rs 1,31,420 crore and advances of Rs 62,869 crore, a regional ratio of just 47.84 per cent. Jammu holds the larger deposit base and the larger branch count, driven overwhelmingly by Jammu district itself, but converts far less of that money into local credit. Kashmir, with fewer branches and a smaller deposit pool, lends out more than four fifths of what it holds.
Jammu district alone reported deposits of Rs 75,201 crore, the highest of any district, and advances of Rs 31,357 crore, the region’s lowest credit deposit ratio at 42 per cent. Srinagar, second largest by business at Rs 67,484 crore, carried deposits of Rs 40,389 crore and advances of Rs 27,096 crore, a ratio of 67 per cent, ahead of Jammu but still below the district leaders.
The strongest credit deposit ratios came from the smaller Kashmir districts. Shopian topped the table at 122 per cent, its deposits of Rs 2,099 crore dwarfed by advances of Rs 2,567 crore, a pattern bankers attribute to the apple economy’s appetite for crop and trade finance. Kupwara followed at 117 per cent, Pulwama at 105 per cent and Budgam at 99 per cent, all with advances outstripping or nearly matching deposits.
Seven districts, all in the Jammu division, closed with a credit deposit ratio below 60 per cent: Jammu at 42, Poonch at 51, Udhampur and Kathua at 52, Rajouri and Reasi at 55, Samba at 58. JK Bank carries lead bank responsibility in twelve of the twenty districts, the ten of Kashmir plus Rajouri and Poonch; the State Bank of India leads the remaining eight.
Regional Contrast
Set side by side, the two regions are almost mirror images. Kashmir holds a smaller deposit base but lends out 81.74 per cent of it, close to the national average of 81.71 per cent. Jammu holds the bigger pool of money but lends out under half, at 47.84 per cent, the number dragging the UT wide average down to 61 per cent regardless of how well Kashmir performs. Strip Kashmir out and the ratio would look considerably worse; strip Jammu out and it would nearly touch the national mark.
Branch economics tell a related story. Jammu runs 1,152 branches against Kashmir’s 1,070, yet Kashmir’s smaller network disburses more per branch, about Rs 64.9 crore in advances against Rs 54.6 crore in Jammu. Deposits per branch run the other way, Rs 114.1 crore in Jammu against Rs 79.4 crore in Kashmir, a fair proxy for Jammu city’s larger salaried and government workforce.
Asset quality complicates the picture. Kashmir’s gross NPA ratio, 3.78 per cent, is markedly higher than Jammu’s 2.33 per cent, so the valley’s stronger credit appetite is not without cost. But the figure is skewed by Srinagar alone, whose Rs 1,501.61 crore of bad debt is 57 per cent of the region’s NPA book; strip it out and the remaining nine Kashmir districts carry a combined ratio well under 2 per cent, cleaner than Jammu’s average. The pattern repeats in Jammu, where Jammu district’s Rs 1,074.31 crore of bad debt is 73 per cent of the division’s NPA. The region’s asset quality problem, in other words, is really a twin city problem, Srinagar and Jammu, not a Kashmir versus Jammu one.
Where to Look
On that reading, Shopian leads comfortably: a credit deposit ratio of 122.30 per cent alongside an NPA ratio of just 1.84 per cent, the apple economy converting deposits into productive, largely performing loans. Ganderbal, Kulgam and Anantnag show an even cleaner pattern, NPA ratios under 2 per cent each, though their credit deposit ratios of 90, 84 and 77 per cent suggest room to expand before saturating. Pulwama and Budgam combine strong ratios, 105 and 99 per cent, with moderate NPA near 2.4 per cent, plausibly reflecting the belt’s orchard trade and Srinagar-adjacent real estate activity. Baramulla and Bandipora carry similarly high ratios, 93 and 96 per cent, but NPA of 4.00 and 4.23 per cent, the highest in the valley outside Srinagar, worth a second look before reading the headline ratios as unqualified strength.
The more unexpected finding sits in Jammu’s Chenab valley. Kishtwar carries the lowest gross NPA ratio of any district, just 0.47 per cent, alongside a credit deposit ratio of 59.84 per cent, the healthiest book among the seven low ratio Jammu districts flagged earlier. Doda and Ramban follow the same pattern, NPA of 1.59 and 1.31 per cent against ratios of 73 and 68 per cent, both ahead of Jammu district, Kathua, Udhampur, Rajouri, Reasi, Poonch and Samba. None carries anywhere near Kashmir’s lending volumes, but on a risk adjusted basis they look like the cleanest, most under leveraged corner of the map, plains Jammu included.
Jammu city and Srinagar, the two districts that dominate the region’s banking business in absolute terms, are also the two places where this simple reading breaks down fastest. Both carry the largest NPA books by a wide margin, and Jammu’s low credit deposit ratio reflects a genuinely under-lent economy sitting on money rather than a risk averse one. Any district level read of appetite has to be weighed against seasonality, since much of the valley’s strength rides on a single crop cycle, and against the fact that a low credit deposit ratio can equally mean an economy banks have not yet bothered to serve, rather than one with nothing to lend against.
Bad Assets
The one number that genuinely improved was bad debt. Gross non-performing assets fell from Rs 4,695 crore in March 2025 to Rs 4,095 crore in March 2026, down 12.79 per cent, while the ratio eased from 3.90 to 3.10 per cent of advances, a meaningful cleanup for a system that has spent much of the past decade wrestling with impaired loans.
District figures continue to show the stress concentrated in the twin cities. Srinagar’s advances carried gross NPAs of Rs 1,501.61 crore, by far the highest of any district, while Ganderbal, Baramulla, Bandipora, Anantnag and Kulgam each carried far smaller NPA books, underlining how much of the region’s bad debt sits in its two largest urban centres rather than spread across the countryside.
Scheme Strain
A second, quieter pressure runs through the loan book alongside the district level stress: the sheer weight of low ticket, centrally sponsored lending that bureaucracy at every level now expects banks to push out each year. The growth numbers show it plainly. Priority sector advances, the category into which most sponsored scheme lending falls, grew 21.66 per cent during the year, more than twice the pace of overall credit growth. Non priority advances, the commercial lending banks extend on their own commercial judgement, grew just 2.01 per cent, a fraction of the priority segment’s pace. Four years ago priority lending made up 40 per cent of the region’s loan book; it is 44 per cent now, and the gap is widening every year.
The ticket sizes make the strain concrete. Under the Pradhan Mantri Mudra Yojana, banks disbursed Rs 8,377.52 crore across 3,70,012 accounts, an average loan of roughly Rs 2.26 lakh; J&K Bank’s own share, Rs 6,174 crore across 2,69,296 accounts, averaged almost exactly the same, about Rs 2.29 lakh. Kisan Credit Card lending for crops shows the same pattern at smaller scale: J&K Bank alone carries 82 per cent of the Union Territory’s active KCC crop accounts, 7,06,952 of 8,63,525, with 74 per cent of the outstanding amount, Rs 4,673.77 crore of Rs 6,312.63 crore. Every one of those accounts carries its own paperwork, monitoring and recovery cost, a servicing burden that scales with account numbers far more than with money lent.
Government Schemes
The scaffolding of subsidised and sponsored lending kept running through the year, with mixed results. Under the major employment generation schemes tracked separately from the Annual Credit Plan, banks disbursed Rs 1,969.29 crore across 44,578 accounts against 82,196 sponsored cases. Mission Yuva, the flagship scheme, alone accounted for Rs 930.56 crore across 18,753 accounts from 47,263 cases sponsored; the National Rural Livelihoods Mission disbursed Rs 637.89 crore and the Prime Minister’s Employment Generation Programme Rs 303.23 crore.
Under the state government’s own Mission Youth programme, its three flagship schemes for young entrepreneurs posted modest but steady numbers by March 2026. Mumkin, the commercial vehicle finance scheme, had sanctioned 147 of 353 applications, disbursing Rs 10.19 crore, with cumulative disbursement since inception of Rs 365.73 crore across 5,278 beneficiaries. Tejaswini, for women entrepreneurs, had sanctioned 42 of 129 applications for Rs 1.86 crore, with Rs 60.46 crore disbursed cumulatively to 1,288 beneficiaries. Together with MYSEI, the three schemes had disbursed Rs 470.70 crore since launch.
The Pradhan Mantri Mudra Yojana remained the largest of the micro credit schemes by volume. Across its Shishu, Kishore, Tarun and Tarun Plus categories, banks achieved 108 per cent of a combined target of Rs 7,745.37 crore. J&K Bank’s own disbursement achieved 102 per cent of its target, cementing its position as the dominant lender in the state’s micro credit space even as its overall market share erodes elsewhere.
