JK Bank is well equipped to guard assets : Mushtaq

Srinagar: The Jammu and Kashmir Bank chairman Mushtaq Ahmad on Wednesday said the bank hasfoolproof measures in place which are implemented to preserve the economic value of assets of the bank if need arises.

The chairman JK Bank said, that the bank is well prepared for the Annual Financial Inspection (AFI) going to be conducted by the Reserve Bank of India (RBI) shortly. “RBI conducts AFI of the books of the bank across the country every year and at every level. It is an in-depth and robust audit that goes down to the granular account level as well. Besides, there is an off-site surveillance also going on through automated reports regularly sought by the regulator. In any case, RBI is due to conduct its AFI for the gone by financial year shortly. And we are prepared for it,” the JK Bank chairman said in an interview.

He said the JK bank has performed really well in a scenario where the gross Non Performing Assets (NPA) levels within the banking industry have gone up to 2.80 lac crores. “The recent controversy is of course related to accounts wherein repayments have been received after a marginal delay. At the end of March 31, 2014, the borrowers have paid the installments in accordance with the terms and conditions of the sanction of the loans. However, we are watchfully monitoring the accounts and be assured that these are not bad loan accounts. We don’t understand how the newspaper arrived at such a figure,” he added.

 Mushtaq said that in March, 2014, the JK Bank had gross NPAs around Rs 783 Cr while as the Net NPLs were Rs 102 Cr. He said that classifying, categorizing loans as NPA is quite a non-affordable thing for a bank. “For, the guidelines to classify loans categorized as Non Performing Assets (NPA) have been laid down by Reserve Bank of India in unequivocal terms. Technically speaking, the asset quality of the banking system globally has deteriorated significantly and non-performing assets of even country’s largest banks have gone up considerably. Even Reserve Bank of India has vetted this fact in one of its reports.

We have a robust mechanism for NPA management enabling us to track down early signs of stress in our loan accounts. We have foolproof measures in place which we implement to preserve the economic value of our assets if need arises.”

He said it is absolutely wrong to assume that JK Bank have not done it and he was satisfied that JK Bank has through a series of proactive measures contained the rise in NPA’s very effectively.

Asked if the bank can run a risk of financial instability, the chairman JK Bank said that ‘whims and fancies are very poor guides as far as banking business is concerned’. “There is a strong rationale behind every performance in the market. When asked about a slump in JK Bank shares,  Mushtaq said the banking index has already been down in the stock market for last many days. “The market price has broadly stabilized and going forward, we are sure that it will settle down at its normal valuations.”

The chairman of JK Bank said the Bank management is conscious of the fact that people of Jammu and Kashmir have a huge emotional equity invested in J&K Bank and it values it to be the most important asset the bank has. “We have braved so many challenges throughout our remarkable journey of 75 years and we have innate capacity to meet any future challenges midway as well. Having invested in a major way in J&K, the bank is the major contributors in the state’s total lending, which currently stands at more than 65 %.   Besides, the bank’s Corporate Social Responsibility is completely focused on welfare activities within the state of J&K,”  Mushtaq remarked.

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