Thursday, March 28, 2024
 
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Mounting NPA glides JK Bank from golden past to a horrid present
‘reality has now surfaced’, depositors sulk




Jammu, February 23, (Scoop News)-When a riff off of rupees 152 crore in Jammu and Kashmir Bank by Mehul Choksi broke out on Tuesday, a journalist friend sitting in this office swiftly informed his Srinagar based paper about it, however, the other end was reluctant to carry the news.

“The bank issues advertisements regularly to our newspaper and carrying of this news item will be construed as breach of trust by the bank management,” the journalist was told by his office. “If the bank is obliging us with their advertisements, we are also doing them a favour by not highlighting their financial misconduct,” replied the journalist. However, the news about bank’s racket was published in the paper next day morning.

For its survival, the bank has been doling out advertisements to newspapers, news portals and news channels on selective basis preferentially on regional and communal lines, allege media persons.

While tabling his budget 2017-18, state finance minister, Haseeb Drabu, informed the state legislature that “with a change in the top management and the board, ‘THE REALITY HAS NOW SURFACED’. The bank has declared Non Performing Assets (NPA) worth rupees 6,000 crore or about 6.4 percent of Gross NPA. There is also a significant under provisioning of impaired assets. As a result of which the bank has had to declare a huge loss of rupees 600 crore for the quarter ended September 2016-17.”

To help the bank on its road of recovery, he offered an equity infusion of rupees 532 crore in two tranches, finance minister informed the house then.

Surprisingly, Bombay Stock Exchange (BSE) data indicates, the banks share too has been registering a constant fall for past several months now. From rupees 85 per share in October last to rupees 66 per share at present.

According to some aggrieved shareholders, the bank management, of late, is creating hurdles for those who want to obtain refund of their shares by adopting delaying tactic by its Hyderabad agent.

NPA’s worth rupees 6,000 crore, hardly anyone in the state knows who are the real beneficiaries of this largesse. Huge sums had been doled out to scores of premier business houses in the state and beyond over the years by the bank management.

A Chartered Accountant’s company whose services had been disengaged by the bank sometime back after he had detected NPA of over rupees 210 crore against a local businessman. By mentioning it as NPA, he didn’t oblige the bank. The CA has a slew of anecdotes to narrate about the swindles that have taken place in the bank in the past.

Mehul Choksi, chairman cum managing director (CMD) of Gitanjali Gems had managed to obtain a loan of rupees 121 crore in 2012 from JK Bank and during past six years rupees 31 crore has been added to the principal amount as interest.

Incidentally, a franchise of Geetanjali at Udhampur town in Jammu region was raided a fortnight back by the Enforcement Directorate (ED) where diamonds and other precious stones worth over rupees 2.25 crore were seized from its premises.

Befuddled due to mounting NPA’s, the management of the bank has gone into confabulation and consultation to find means to overcome this tide and amend its blunders which have led to the huge accumulation of bad debts and to the order of nearly 5 percent of Gross NPA.

Finance minister, Drabu, had to appeal to three lawmakers, Hakeem Mohammed Yaseen, Mohammed Yusuf Taragami and Mohammed Akbar Lone, in the lower house during recently concluded budget session, not to rake up the issue of JK Bank’s functioning. The lawmakers wanted to have a threadbare debate on mounting NPA’s in the bank but their move was thwarted by timely intervention of Drabu for the sake of bank’s credibility.

The debate on the subject would certainly reflect on the performance and the credibility of the bank, he replied.
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