Banks, technically speaking , must enjoy functional autonomy and should be least interfered into, subject of course to the cardinal principles of good, professional and innovative governance as also transparency in functioning. Banks in India are primarily governed under Banking Regulation Act 1949 amended in 1966 . It stands applicable to Jammu and Kashmir since 1956. Banks, it is fairly understood, need to adhere to absolute norms of probity and transparency with inelastic characteristics in publishing annual financial results through its statements and the ultimate Balance Sheet where no room for any window dressing in inflating profits or circumventing slippages in asset accounts through least manipulations can even be thought of. It also means foolproof, efficacious and infallible staff recruitment procedures, promotions and even a well defined transfer policy. Extension of RTI Act and the most important CVC guidelines must be the hallmark of the levels of transparency of any bank functioning in the country. Almost, all banks do have all these basic operational characteristics.
With the above background and in order to bring parity with other Public Sector Banks, the Governor’s Administration on Nov 22 accorded approval for treating Jammu and Kashmir Bank Ltd as a Public Sector Undertaking (PSU). That automatically means that the provisions of the RTI Act 2009 will be applicable to the bank as also the CVC guidelines. The accountability aspect has not been lost sight of in the sense that now the bank stands accountable to the State Legislature like other State PSUs. The Annual Report of the bank will henceforth be placed before the State Legislature through the State Finance Department. This undoubtedly, is a significant decision aiming at upping the stature of the bank, established in 1938, in terms of varied transparency and better governance. This bank has the distinction of being the only State Government promoted bank in the country where as on date, the State has 60% of its shareholding and as the biggest shareholder has an increasing stake and say in its affairs of governance without disturbing any equations of professional autonomy.
Since the main connecting thread between its main constituents – the banking public and the bank is trust as also between the bank and the State Government and with the Reserve Bank of India, these measures were going to contribute to promote more trust and better corporate governance. Otherwise also, the entire banking sector has been undergoing reforms and changes in tune with global trends , but the above mentioned measures have been critically appraised if not sideswiped in absolute terms, by certain isolated quarters harping at operational autonomy. The Governor’s Administration, in this connection, has allayed their “fears” clarifying that only three main elements have been introduced. Firstly, the bank to be treated as a Public Sector Bank. Secondly, the bank is being brought under the ambit of the Right to Information Act and to follow the CVC guidelines and lastly, to be accountable to the State Legislature and present its annual results before it.
It may be noted that generally the public has increasingly hailed these steps as these are leading to further cementing and strengthening the public trust in the bank and as a natural corollary, the State Government must have these basic elements towards elementary reforms introduced in the Bank due to, besides having 60% shareholding, it was keeping lion’s share of Government funds with it as deposits mostly in no interest or low interest bearing deposit accounts. CVC guidelines are of tremendous importance and cannot be compromised as in most of the PSBs, CVC clearance is required for the senior staff members even at the time of retirement to get superannuation benefits thus strengthening probity and integrity.
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