Srinagar: Even as the J&K Bank is celebrating its platinum jubilee, this is first time in the bank’s 75-year history political groups and civil society is holding it accountable for what is being described as a “manipulated balance sheet” .
The disclosures about the J&K Bank’s upsettingly high rate of Non-performing Assets-NPAs have evoked sharp political reactions with the Srinagar MP Tariq Karra demanding that the names of big defaulters be made public.
The Jammu and Kashmir Bank, which witnessed a dip in its quarter profits, in a statement had claimed that it posted a net profit of Rs 130.05 Crore for the quarter ending June 2014.
Experts view it otherwise as according to them the net profit of the bank has declined by 60 percent compared to last June 2013 and 50 per cent compared to March 2014. The net profit of Jammu and Kashmir Bank is now just Rs 130 Crore compared to Rs. 308 Crore in June last year and Rs 250 Crore in March this year and it is the sharpest decline in the banks quarterly profitability ever.
Financial experts say that the position of the Bank is disastrous as its current balance sheet is less profitable and unstable. The Bank Management is trying to justify their failures in the garb of economic slowdown of county and is claiming that that worst seems to be over. Nothing is over. There is more trouble in offing as the asset quality of the Bank is much, much poorer, an expert said.
Experts say that depiction of the profit is actually a big loss in another sense. If we minutely observe and have a closer look at the current balance sheet of the Jammu and Kashmir, we find what Bank management is treating as profit is actually a loss, says Haseeb Drabu, former Chairman of J&K Bank. In a newspaper commentary, Drabu claimed that the Bank management had made the current balance sheet too fragile by showing a profit after reducing the Non-Performance Asset coverage ratio from 90 per cent to 55 per cent.
Former Finance Minister Tariq Hamid Karra blames outside defaulters for the mess and holds current Bank management responsible for the current financial position of the Bank. Let Jammu and Kashmir Bank come out with the list of NPAs crossing Rs. 10 lakh. This Bank has offered loans worth thousands of Crore rupees to outside state companies and the Bank management has failed to recover that loan, Karra said.
He said that there was a need that Jammu and Kashmir Bank came up with the list of those defaulters who are not only from the state but from outside. Most of the defaulters are from outside states.
UG Group run by industrialist and liquor baron Vijay Malya is the biggest defaulter who owes billions of rupees to Jammu and Kashmir Bank. Why doesnt Jammu and Kashmir Bank name Malya as the defaulter? Why this double standard. When this Bank doesnt hesitate to publish the photographs of common Kashmiri defaulters in newspapers without caring for their future then what stops it from publishing the list of outside defaulters, Karra questioned.
Member Parliament Tariq Hamid Karra said in an interview that Jammu and Kashmir Bank management had advertently concealed the stressed or bad loans (loans which cant be recovered from defaulters in required time) amounting billions of rupees. The picture of the Bank will become clear once it will publish the list of all outside state defaulters. Mere issuing statements and providing lip service is not going to help the Bank, he said.
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