If any Bank has to survive and grow , its performance must be very frequently measured which can be done in more than one way . The element of profitability and on sustainable basis for any Bank is cardinal . It must also be analysed as to what is a Bank’s structural and non structural approach in meeting the challenges of competition and profitability. It is an era of not only consolidation of Banking System in the country and going in for more mergers out of which emerges the element of withstanding stiff and qualitative competition but of being a part of greater mission of Digital India. Besides more and more banking products being introduced by modern day Banking System in the country , the working and surviving becomes more challenging. Not only in the area of profitability but in areas of most of the modern day Banking products , Jammu and Kashmir Bank has been trying to keep a commendable parity. It has now overcome the challenges and hiccups that it had to face a few years ago in managerial and post sanctioning scrutiny areas relying mainly on its inherent strengths built equally over years. It was established by the visionary Maharaja Hari Singh in October 1938 with a paid up capital of Rs.5 lakh hence being one of the oldest private sector Banks of the country.
It may be the introduction of e-banking or credit card area or in the vulnerable field of lending to priority and non priority sectors or in the most vulnerable and sensitive are of profitability, Jammu and Kashmir Bank is showing better results. Recently, two Digital Banking Units (DBUs) among 75 across the country were those of the J&K Bank inaugurated by the Prime Minister which is of no less importance as aiming at promoting financial inclusion depending upon and depicting the managerial capacities and the vast area of its operation. It is the only private sector Bank that enjoys as much Government protection and the cover of the supportive umbrella provided by the Government of Jammu and Kashmir. It is as such enjoying the status of the premier financial institution of the UT of Jammu and Kashmir and even the UT of Ladakh. Under such conditions, it is but natural that the Bank must show a consistently growing graph of its profits which are worked out on quarterly basis and analysed too accordingly to overview a consistent and steady growth.
On comparison with the last year ending June quarter, the Bank has shown an increase in profits to the tune of 119 percent and on half yearly basis, the increase is 90 percent indicating more or less a sustainability factor which is a positive sign of real growth. It is , however, assumed that proper provisioning for bad debts having adequately under RBI norms been made to arrive at the given figures. Figures of net profits in this regard are encouraging which are worked out after having met all costs out of the total income earned.Endeavours to keep cost low as compared to income appear equally fair going by the cost to income ratio of the Bank on comparison which has gone down from 70 to 64 percent. Taking the element of internal audits, RBI inspections and audit by external auditors conducted on periodic intervals , transparency and elimination of window dressing manipulations should stand fully verified and without prejudice to the authenticity of the figures worked out, such inspections now- a- days lay more emphasis on strict provisioning measures and management of NPA portfolios which as per declared results have come down from 9.09 percent to touching 8 percent. That area, however, cannot be termed as ideal as it is more than the average of Indian Banks for the year 2021-22 at 2.3 percent. Hence recoveries must be on vigorous basis.
Since Jammu and Kashmir Bank is committed like other players in the field to lend in core priority areas especially Governmental schemes for promoting self employment schemes, chances of NPAs are more but inbulk lending to other sectors carrymore lending risks which can be obliterated with quality appraisal and adequate marketable security cover. We trust, looking to encouraging results in operating and net profits , that vital area in lending is taken due care as the Bank is enjoying almost all revenues of the UT Government on exclusive basis and hence almost free of cost funds at its disposal to lend at prescribed rates which must necessarily, as a special factor enjoyed by it, give more leverage for earning profits and keeping / managing vital NPAs portfolio around 3 percent.
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