The Daily Excelsior publishes since of the excerpts of the interview of Chairman & Managing Director J&K Bank R K Chhibber
DE: At the outset, for our younger audience, we would like you to begin with the genesis of J&K Bank. How did it come into being and who founded the bank?
JKB CMD: It was in the late 1920’s, when Maharaja Hari Singh assessed that lack of access to credit was the main reason for economic backwardness of Jammu and Kashmir, and conceived the idea to establish a kind of State Bank for J&K. Subsequently, Sir Sorabji N. Pochkhanawala, the then Managing Director of the Central Bank of India, was approached to suggest the frame-work for such an entity.
On September 24, 1930 Sir Pochkanawala submitted his report recommending a semi-state bank. On 29th September, 1930, Maharaja’s cabinet approved the formation of ‘a semi State Bank with the State subscribing part of the capital, and the balance from the public with the Management control held by the State.’
Finally it was on October 1, 1938 that a Certificate of Incorporation was issued, and the Jammu and Kashmir Bank Limited came into being. Notably, Major General Roy Bahadur Dewan Bishen Dass was appointed as the first Chairman of the Bank.
Since then, our growth story has been one of the enduring saga of successes in spite of ups and downs throughout our journey wherein J&K Bank spectacularly yet silently transformed the entire financial landscape of the region by scripting countless tales of accomplishments achieved by individuals, families, groups and communities across its operational geography.
The institution is marching ahead despite bigger challenges and complex conditions, and today, after over 82 years, I feel proud to state that today we have more than 1.8 crores accounts across the country.
DE: Tell us something more about the Bank, its vision, numbers and placement in the larger banking industry.
JKB CMD: In more specific terms, we are a scheduled commercial Bank, unique in many attributes, with an impressive history and a proud legacy spanning over eight decades. Ours is the only bank incorporated as a state government promoted bank, unlike other PSBs of the country. As on date, majority stake of the Bank is held by two union territory governments, i.e. J&K and Ladakh with a combined holding of 68.18%.
And, we perceive our role in the region as that of a developmental financial institution, which extends our resolve to work for the overall socio-economic empowerment and progress of the people in this region. Financial empowerment of people being the quintessence of our vision, we have always envisaged our home region, J&K and Ladakh, as financially inclusive, economically vibrant with expanding avenues for entrepreneurship and progressive enterprises.
With a business turnover of more than Rs 1.75 lac Crore, we have over 2400 touch points across the country with major number of outlets in J&K and Ladakh, while having a sizeable presence in all major centers of the country.
In J&K, we enjoy market leadership commanding over 65% of the banking business share and owing to this we have been designated as Convenor Bank for bankers’ level committee in J&K UT and also agency bank for undertaking banking business of the government in both UTs of J&K and Ladakh.
DE: How did J&K Bank perform in the third quarter of current financial year? Can you please take us through these numbers and tell us how do you see these?
JKB CMD: Going by the numbers, I think, we have performed quite well and delivered profits for third consecutive quarter despite tough market conditions.
Backed by higher Net Interest Income (NII) that increased by 15% YoY to Rs 1005.13 Cr, our Q3 profit is up by 32.84% YoY at Rs 65.94 Cr. Our operating profit also jumped 68% to Rs 563.47 Cr as against Rs 335.56 Cr recorded on December 31, 2019. The net NPA’s as percentage to net Advances ratio halved to 2.50% from 4.36 % while as the Gross NPA ratio sharply declined to 8.71% from 11.10% recorded as on December 31, 2019.
The Provision Coverage Ratio for the reviewed quarter is at 83.67 % – one amongst highest in the industry – as against 73.30 % recorded during last financial year. The Net Interest Margin (NIM) for the quarter has improved to 3.88% (annualized) as against 3.68%.
Pursuing our strategy of preferring provisioning to profits so as to strengthen the balance sheet while keeping other key ratios comfortably intact, we have laid a stronger and better foundation for our future growth. And as we know it’s the growth-momentum that remains the focus not only of banking industry’s outlook but is at the heart of country’s economic stance amid country-wide Covid-vaccination drive.
DE: How does J&K Bank envisage the future of J&K economy in near future?
JKB CMD: As far as we understand, the future of J&K economy is very bright given the fact that the development of UT’s economy has assumed greater significance, of late, even at the national level. And as institution of systemic importance, we see our role central to the execution of government’s economic and developmental agenda because of our placement at the heart of region’s financial architecture.
DE: Central government has approved a 28,400 crore incentive package to boost industry and generate jobs in the newly created Union territory of Jammu and Kashmir. How do you see J&K Bank placed in all this?
JKB CMD: The industrial developmental scheme approved by the Center for JK UT to boost the region’s economy and provide employment opportunities in both manufacturing and service sectors with a host of incentives will lead to socio-economic development, boost domestic manufacturing and help Jammu & Kashmir in becoming self-reliant.
The package is expected to encourage new investment, substantial expansion, and also nurture the existing industries thus accelerating the virtuous cycle of savings and lending. The Bank with its massive outreach and across-the-spectrum client base will not only be the biggest beneficiary but also act as the catalyst for the fast-track economic development that is about to usher in on the back of the scheme.
DE: J&K Bank was once a cynosure of share market. What are your plans to make bank’s share one of the most sought after in the industry?
JKB CMD: With improved performance and better value-proposition for the investors the share price also witnesses an upward trend. Our Bank has vastly improved its numbers in terms of key financial parameters like NIM, Gross NPA, Net NPA, Provisions Coverage, CASA, and Capital Adequacy besides its gradually improving bottom line.
Better financial numbers are bound to reflect in improved share prices of the bank and positive trend in the value of our stock is already visible since we declared our half-yearly results.
DE: As J&K opens up post-August 2019, new players are set to start operations in UT of J&K and Ladakh which means more competition for J&K Bank. You must have some plans to tackle the challenge.
JKB CMD: We see competition as a healthy trend that helps us to bring out the best for our customers. Being a customer-centric organization, we always welcome competition and strive to compete in a healthy and transparent environment.
Having said that, our core strength originates from the wellsprings of emotional equity that the people of J&K, Ladakh and Rest of the country have invested in the bank for decades now. Our customers are our forte and the increasing presence of any other player here, as you mention, shall further strengthen our resolve to deepen our bonds with our people, improve our customer services and keep offering them with best-in-class, innovative, easily accessible financial products, banking services and facilities at competitive rates across the physical and digital domains.
Our position is also fortified being designated as lead bank in 12 districts of J&K, out of total 20 districts with more number of districts expected to be added to our kitty shortly. Having the responsibility of the agency bank for carrying out banking business of the government in the UT is another important feather in our cap.
DE: J&K Bank is considered second biggest employer after government in Jammu and Kashmir? Tell us about bank’s plans in this regard.
JKB CMD: Let me just make a simple clarification in this regard. J&K Bank generates more employment indirectly than through its direct recruitment. Through our finances we keep on providing opportunities of self-employment to the young energetic youth of the UT. Like during the UT Government’s recent B2V-III Program we have so far sanctioned Rs. 270 Cr to over 17000 youth. To make such a drive successful, the bank designated Special Desks both at Zonal and Branch levels across the UT to counsel and hand-hold the aspiring entrepreneurs throughout their journey towards economic self-reliance. Same way, with a special focus on MSMEs, we are financing thousands of business ventures in J&K and the rest of country, which essentially facilitates the financial and economic self-sufficiency of the country’s most important demographic segment i.e. youth.
Now coming to the direct employment part, we are almost at the concluding phase of one of our hiring processes involving recruitment of 350 Probationary Officers and 1500 Banking Associates. Besides, we are also hiring people for specialized jobs through lateral placements.
DE: What are the career progression plans for the staff?
JKB CMD: I believe that career progression is one of the key means to keep the motivational tempo of our staff high. After a brief lull due to Covid-19 and other related issues, the career progression process has already been initiated in the management band.
As part of our succession planning, we have made quite a good number of elevations within the bank’s management band to strengthen the overall management structure to ensure swift disposal, effective implementation and timely compliance. Now the same exercise of career progression will be carried forward across all the cadres to as part of institutional requirements to increase the efficiency and improve service delivery mechanisms. However, all these measures remain organically linked to the bank’s performance in terms of profitability and growth.
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