| News Details |
| Jammu and Kashmir bank on centre's target: Tarigami | | 
Srinagar, September 12 (Scoop News)-CPI(M) leader Mohamad Yousuf Tarigami on Thursday said that the Jammu and Kashmir Bank, despite being classified as a private sector bank by the Reserve Bank of India, functions more like a public sector bank due to its ownership composition.
The bank's role in the conflict zone has been instrumental in providing economic development to the region which was badly affected by its geographical existence. As it is the only bank in Jammu and Kashmir through which the government implements social welfare schemes, financial inclusion programs and startup financing, thus it plays a crucial role in the state's economy.
While other banks prioritize profit-making, Jammu and Kashmir Bank has shown a willingness to take risks and support the region's development. However, recent changes in central government policy towards state subjects, a policy change from empowering people to disempowering them is getting reflected in policy stance of public institutions and thus J&k bank is not an exception to it. As off late j&k bank has introduced n number of charges and one such charge is the introduction of minimum balance charges, have raised concerns about the bank's commitment to serving the needs of its customers, though this new posturing is against the core ethos of J&k bank as it was known as "Dastgeeri bank "
This will give you an insight into how private banks function. They are often more risk-averse when it comes to financing startups, although they may be aggressive in acquiring established businesses. However, a region that is still developing economically cannot afford such a risk-averse approach to banking.
As the central government continues its disenfranchising and disempowering policies, they have realized that the Jammu and Kashmir Bank is one of the few institutions capable of making Jammu and Kashmir self-reliant. It is also the only institution through which the Jammu and Kashmir state government can absorb the financial crunch imposed upon the state by the Central government, therefore, they want to take control of the bank.
The importance of the Jammu and Kashmir Bank to the state's economy is evident in the Prime Minister's speeches, although his claim of transforming the bank is exaggerated, as the improvements in its financials are industry wide phenomena not a bank specific improvement.
As the banking industry as a whole has experienced significant improvements, with a decline in non-performing assets (NPAs) and increased profitability. For example, the gross NPA ratio of scheduled public sector banks in India decreased from 8.9% in March 2019 to 5.9% in March 2024 whereas in J&k bank it has reduced from 08.9 % to 4.1%. Additionally, the net profit of PSU banks increased from ₹1.59 lakh crore in FY2019 to ₹3.26 lakh crore in FY2024 while in J&k it has increased from Rs 1197 crore to Rs1797 crore.
Despite these industry-wide trends, criticisms of Jammu and Kashmir Bank's pre-2019 management seem unjustified and are being used as a witch hunt to further disempower the state and its people.
The central government is aware of the political ramifications of seizing the Jammu and Kashmir Bank from the state. They may attempt to achieve this through regulatory route, such as requiring private banks to maintain a ceiling of 26% promoter equity, forcing them to sell the remaining stake. Here it is pertinent to mention that J&k bank because of its special character used to get an exception to such regulation.
Thus, selling the stake to private players could lead to a financial catastrophe similar to the Indus Water Treaty, where our own deposits might not be accessible to us. It is imperative to safeguard this valuable asset and ensure its continued service to the people of Jammu and Kashmir.
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