Principal Asset

Its status as the principle mover and shaker in J&K’s economy is undisputed. For generations across the state which have grown with the bank, its grand mix of traditionalism and modernity makes it their first choice, reports R S Gull

Chairman JK Bank Mushtaq Ahmad
Chairman JK Bank Mushtaq Ahmad

Put simply, banking in J&K has only one address – J&K Bank Pvt Ltd. It is neither because of its towering assets within the state nor the territorial monopoly it has in the region. Its contributions over the generations speak for itself.

Take any parameter that defines any activity in banking, J&K Bank has a share no less than sixty percent. The only lowest percentage we have in, said an executive almost jokingly is the NPA: “We own only 31% in the cumulative gross NPA of the banking sector in the state while our share in the overall lending is 63%.”

“We are looking at home turf more seriously and it is already showing: we invest 52% in J&K and only 48% outside the state,” Chairman and Chief Executive Mushtaq Ahmad said. “In coming days you will see more branches being added to the areas where usually others avoid going.”

J&K Bank has remained part of every individual’s growth story. One has to pay his school fee, sit in the board, university examination, make a demand draft for his recruitment application, check salary of the dad or pension of grandfather or even social security payment of the granny in the neighbourhood or simply clear his power tariff – every time it is J&K Bank. These intermediations for an individual have created the institutional brand loyalty. This loyalty becomes a much stronger statement when, in a highly politicized society, the bank emerges virtually the only major success story of the state in last more than 77 years. It is the only listed company of the state.

“There are shareholders who get dividends, there are employee who work and get salary,” says Abdul Rashid, an old city pensioner, a frequent visitor to the bank. “But there are people who have nothing to earn or lose but still have their emotional equity in it.”

While this kind of attachment often helps the managers survive in situation they are caught wrongly in, this kind of loyalty is a major source of bank’s strength, spread, success and scope.

The bank, at the same time, has remained the main model in helping the population stay tuned with the latest in the finance market. Its offices in Srinagar, Delhi, Mumbai and Jammu are perhaps the best constructions in the “government” sector. It was first to tell J&K what ATM looks like and, so far, the only institution that gave them the first introduction in stocks and the plastic money. It lead them to insurance beyond LIC and the non-life insurers or for that matter proved the banks can help improving the infrastructure that is wasting for want of funds.

“When my boss once gave me some tips, I became an instant hit in the finance circuit in Mumbai and rubbed shoulders with people whom I had read only in newspapers,” an executive, basically from a central Kashmir village, said. “That boosted my morale and I could see a change in myself, something I owe to the bank I work for.”

It is not only about its network. It is about experience that an institution has acquired over the years. There is not a single programme or a scheme of either the central or the state government that is not handled by the J&K bank. Better implementation, as compared to other banks, makes J&K Bank part of the governance structure unlike its competitors.

J&K Bank was the principle banker who committed to investing in Baglihar-I and later replaced at least two other banks which came out of the consortium. It is again the first investor of the Baglihar-II.

As banking leader in the state, it literally works as the local regulator of the banking sector. While working with the government, it functions as a development institution. At one point of time, it even implemented central government’s common services centre (CSC) which are locally known as Khidmat Centres. These are currently not functioning the way they were supposed to, partly because of disinterest at some level in the bank and partly because of the lack of services that government failed to roll-over.

Of around 16500 estimated people serving the banking sector in the state, more than 11000 serve J&K Bank. Mushtaq Ahmad said they are in the process of recruiting more as branch network is growing gradually.

There is not a single major company in the state that has grown without partnering with J&K Bank. It is true across all the sector of economic activity. “Even in companies that are serviced by other banks now, you can go and see our indelible imprints, especially at the start,” suggested an executive who retired recently.

Some of the critical interventions by the bank have been of immense importance to the state. It has liberally funded the industry in Jammu, agriculture and crafts in Kashmir. Its sees post-harvest as its new sunrise sector. “We are part of the CAS story and we are keen to take it further,” Mushtaq Ahmad said. “This sector is very important to the well being of the state.”

Bank’s earlier intervention in horticulture sector has reduced apple growers’ dependence on the Delhi middlemen but the story still needs lot more to reach the desired target, even bank insiders admit.

But the bank bosses do not accept they are facing stiff competition. “It sometimes surprises me when I hear about these presumed competitions,” an executive confided. “In fact all these banks are led by staffers whom we baptized into banking and we get happier when they are talked about.” He said competition is good for the sector.

In J&K Bank, the executive said, profit-making is not everything we work for. “The social aspect of the banking, not counted as a parameter, is something that we think before profits,” he insisted. “If a crowd of 500 widows seeking petty social security payments or a 1000 pensioners get into a swanky premises of a modern bank, they will feel drowned and suffocated unlike us because this is just our routine and part of our responsibility.”

Dismissing that IT is pushing other ahead, Ahmad said Electronic Bank Transfer (EBT) is just an indicator. “Initially, we were given 12 of the 22 districts and later with a sister bank conveyed its inability to implement in the assigned districts, the entire project was given to us”. By now six districts have EBT running satisfactorily as all the social security benefits are being directly transferred to the individual beneficiaries in their accounts. Remaining seven districts are in the advanced stage of validation of nearly 140 thousand bank accounts. He said they are weighing every technology before putting in to use. “There is no technology that we do not use,” he said. The bank has already hired a consultancy firm to seek suggestions on the HR front and to improve its efficiency it has added four more zones to the existing seven.


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