J&K Bank announces to 'resolve and recover' bad assets
In his maiden presser, Parvez says committed to support traders; ready to give thought to Islamic Banking
5 Dariya News
Srinagar 10-Oct-2016
As banking industry across India reels under huge volumes of Non-Performing Assets and amid unrest in the Valley, Jammu and Kashmir Bank on Monday announced to "resolve and recover" bad assets.Addressing his maiden press conference after being appointed as Chairman of the State's leading bank, Parvez Ahmad also announced the bank's commitment to support traders and other borrowers in "every possible way""We are passing through very turbulent times. Amid the situation wherein banking industry across the country reels under huge volumes of Non-Performing Assets and continuing unrest across Kashmir valley; strengthening and cleansing of the bank’s balance sheet shall remain our top priority for the next six quarters", Parvez said in a jam packed press conference at bank's corporate headquarter.Flanked by the Executive President Abdul Rauf Bhat and Senior Presidents M. S. Wani and S. K. Bhat, Parvez also hinted that the bank may take some difficult decisions in future.
Parvez, who is also CEO of the bank also asserted that the stability of the bank shall be bank's focus in the next six quarters."In order to improve the bottom-line growth, we may not book profits, pay dividends or taxes. There may be no contributions to CSR spending. For the provisioning coverage ratio has to be improved at any cost as it has nosedived from more than 90 pc to merely 50 pc", Parvez said.However, he assured the investors of decent returns on their investments in the bank.Putting forward the approach to resolution of NPAs and recovery in stressed assets, he said that the bank was gearing up to resolve and recover the bad assets (9.3 pc) and stressed assets (10 pc), through available mechanisms like legal recourse, one-time settlements or selling them off to Asset Reconstruction Companies.On bank’s future strategies, Parvez Ahmad asserted, “After taking stock of the situation, we have devised a comprehensive plan and re-oriented our strategies to meet new challenges.The centre-piece of the strategy would be moderating growth targets (10-15 pc) with asset-quality at its heart for the rest of India, while as building further upon our lending profile within the state.
For, in J&K we are more into the development of economy as a whole rather than a bank merely selling its products and services against certain returns.”
Speaking about the bank’s position on impact of current unrest on the valley’s traders and businessmen he said, “We know that the current unrest has led to the drying up of cash flows of our borrowers here and we remain committed to support them in every possible way.”We have already moved an application for appropriate measures to RBI in this regard, he added.He assured the people that there will be marked improvement in bank’s customer services including the upgradation in services and updating of product offerings designed to meet specific requirements of customers.On demand regarding Islamic Banking by the JKB, Parvez said that it would be looked into and discussed with RBI."Well, we have not given a serious thought to it, but there is a lot of demand for Islamic Banking in the state. Few clients who do not want to have the interest on their saving bank accounts, we do not have the mechanism how to take care of that particular component. But, we will examine the proposal and we have to also take RBI on board," Parvez according to news agency GNS said.He said subject to the proper examination of the proposal and the acceptance by the regulator RBI, the bank is "very much willing to offer this type of product line to the customers in J&K".
When asked about the current situation and its impact on the economic activity in Kashmir, Chairman J&K Bank said, “We have a rich experience of working and reporting growth in fragile situation for more than two decades now. We will overcome this situation as well”. To another query as to whether the Bank was feeling threatened with the influx of private sector banks in the state, Parvez said "Don't compare apples with oranges"."So far as our Bank's positioning is concerned, it has 63 per cent share on the asset side, 62 per cent share on the deposit side, out of 862 branches, 745 are in the state, out of 1030 ATMs, 950 in JK state, 90 per cent of the population is dealing with JK Bank, we have branch in every block of the state", he said."With these kind of numbers, I do not see what kind of competition we are talking of. We have a monopolistic character, we have dominance, but we also need to be humble and we need to be supported well in order to retain our dominant position because J&K state is central to J&K Bank and its existence and it is the primary source of deriving the key advantages," he said."Other banks are only offering products and services, we are more concerned about the development of JK state as a whole," he said.Responding to another question regarding the bank’s recruitment plans, he said, “J&K Bank is the second major employer in the state after the government and we will continue to be so in future as well.”Speaking on the sidelines, Mr parvez Spelled out his Strategy for immediate future and informed that services of A Consultant of International Repute shall be hired for working out a Business Plan which integrates our Reviewed Human Resources policies and aligns its processes with the Technology Platform of the Bank. (GNS)