Srinagar: The Kashmir Chamber of Commerce and Industry (KCCI) has said that the Government is only a shareholder in the Jammu and Kashmir Bank and they oppose its decision to turn it into a Public Sector Undertaking (PSU).
In a statement, KCCI said, “The J&K Bank cannot be treated as any other Public Sector Undertaking as it is a public listed company and is also governed under Banking Laws. The decision is being seen as unwarranted interference in the functioning of the Bank. It is because of the autonomy, Bank enjoyed since it’s inception, that it has attained present level and become an important component in the existing economic structure of the State.”
The statement added, “Reportedly more than 50,000 shareholders have stakes in the Bank. The Government is only one of the shareholders with only 59.3 % shareholding. In the strict sense, it is not a department of the Government nor is owned by the Government. It is not even substantially financed by the Government. Instead, the Government receives heavy dividends from the Bank. The people of the State have a vested interest in the functioning of the Bank. More than 90% of our members are connected with the Bank in one form or the other.”
The KCCI also said that, it is for the first time that a Governor has interfered with the Bank.
“Our State has seen so many Governor’s in last seventy years. The State has been brought under Governors’ rule eleven times. Not a single Governor tinkered with the functioning of the Bank. It is for the first time that Bank had to engage additionally 582 banking associates when they were not needed as per the requirements. Reportedly, not a single case was filed against the Bank questioning the recruitments made by it. But for the intervention of the Executive Head, more people came to be engaged increasing the avoidable expenditure of the Bank,’ the statement said.
The Chamber also pointed out that the government has failed to provide employment to the educated youth and is trying to shift the blame on the Bank.
“Engagement of our unemployed youth cannot be resolved by providing them services in the Bank. Reportedly, architects, graduates, post graduates and other professionals have been engaged for rendering banking services, when their services could have been better utilized in the concerned departments of the Government. It appears that failure of the Government to provide employment to our educated unemployed youth is sought to be shifted to a semi-private Bank. It further appears that since the Bank has done well because of the credibility and support it enjoys among people as an institution, the decision was taken to bring down this institution to a level of PSU of the Government. Is the intention to cause failure of the Bank at the cost of our people who depend for their livelihood on the assistance rendered by the Bank?”, the statement said.
The Chamber feels that people now will have to face cumbersome red tapism in an institution which was otherwise ‘theirs’.
“The Bank has over a period of time become synonymous with the identity of the people of the State and occupies a special sentimental place in their hearts. They consider it to be their own bank. The people and the Government under the existing scenario are not on the same page. The people look upon the Bank for financial help. Since it is now a PSU, people needing help will have to follow cumbersome red tapism and seek clearances from bureaucracy or ministry. The CEO of the Bank is reduced to a Managing Director of the Company,” KCCI said.
“So far as the position of non-performing assets (NPA’s) is concerned there is evidence to show that the people in the State repay the loans they borrow from the Bank. It is only few persons holding political power who can be counted, amongst others as major defaulters. It will be difficult for the Bank to proceed against such defaulters because they are the one who have a say in the Government,” the statement pointed out.
The KCCI also added that it views the whole issue in the context of J&K Bank as an institution.
“Till date, if the Bank has done well as is evident from it’s records available in public domain, it’s management being efficient evident from the share value of the Bank in the Stock Market and above all people of the State, in particular members of the trade community, being satisfied, no reason much less a credible reason is seen in declaring the Bank, under sunset orders, as PSU, bringing it within RTI and CVC when such issues are pending before the High Courts.”
The Chamber also said that current liabilities in PSUs is estimated to be more than Rs. 10,000 crores.
“The KCCI has been on record to express its concern at the losses to our economy being caused by the lack of accountability in the State owned Public Sector Undertakings. A conservative estimate shows the current liabilities of these PSU’s to be upwards of Rs.10,000 Crores. In addition, the locking up of resources in the shape of infrastructure, land, manpower and potential has a consolidated negative impact – primary and consequential – running into lakhs of crores. Audits have not been conducted since decades and mandatory Board Meetings are not being convened over years causing huge losses.”
The KCCI believes that the Bank’s status as it was on 22nd of November, 2018 should be restored.
“Should any improvement be required, it can be discussed with stakeholders,” the statement said.
Moreover, the KCCI added that the statement given by the spokesperson of the Government gives the impression that the decision was only aimed at promoting good governance and transparency in the functioning of the bank. Other statements have emanated from the Prime Minister’s Office.
“These statements betray the intentions of the decision-maker. These statements dissemble public minds. Real motives are writ large.”