Profit up, NPAs down, major part of loans given to Malaya recovered
Excelsior Correspondent
JAMMU, June 11: Jammu and Kashmir Bank (JKB) CEO & Managing Director Baldev Prakash has said that the bank has achieved historic annual profit of Rs 1197 crore during financial year of 2022-23. The Bank, he added, is also in forefront of lending helping hand to unemployed youth by providing them financial assistance under various Central and UT Government schemes.
Prakash disclosed that the Bank has engaged a globally renowned consultancy firm for rationalization of staff and preparation of future manpower plans and the project is at an advanced stage of completion. The Bank recruited 1800 employees including officers and clerical cadre during 2021 and 2022 in the Union Territories of Jammu and Kashmir and Ladakh.
In an exclusive interview to the Excelsior, the Jammu and Kashmir Bank CEO & MD said gross Non-Performing Assets (NPAs) have improved remarkably to 6.04 percent as against 8.67 percent a year earlier while the net NPA figure has reached 1.62 percent from 2.49 percent.
To a question as to whether the Bank has suffered financial losses due to escape of Vijay Malaya and Nirav Modi from the country, Prakash said the Bank hadn’t given any loan to Nirav though they had taken some exposure with Kingfisher Airlines of Vijay Malaya but major portion of the granted loan has already been recovered from the sale of underlying security i.e. shares of United Breweries (UB). Outstanding exposure to the company is below Rs 20 crore which too is fully provided for.
Excerpts of the interview:
Q: After passing through a slow phase of growth and subdued earnings, J&K bank has achieved its highest ever profit so far. Is it a beginning of a new chapter of growth and stability for the Bank?
A: Yes, definitely. We did achieve historic annual profit of Rs 1197 Cr for financial year 2022-23 while recording our highest-ever quarterly numbers at Rs 476.33 Cr in March 2023 quarter.
With availability of growth capital, we recorded advances growth of 17% for the FY 2022-23 while as deposits increased 6% YoY. On Asset Quality front we achieved remarkable improvement by bringing down gross NPAs down to 6.04% after eight long years and a decadal high Capital Adequacy Ratio (CAR) of 15.38%.
So, as a Bank we have not only stabilized institutionally but have embarked on a growth journey towards becoming the lead performer among our peer group.
Q: Starting its journey in 1938, J&K Bank has emerged as a strong regional old private sector bank in country. Tell us about the Bank’s current presence along with the expansion plans going forward?
A: Yes we are the leading financial institution in UTs of J&K and Ladakh. As of now, we have a vast network of 997 branches, 82 Easy Banking Units (EBUs), 24 Extension Counters (ECs), 1418 ATMs across the country covering 18 States and 4 Union territories. Additionally, we have 1067 Business Correspondents serving people of difficult and far-off geographies through Khidmat Centres (Common Service Centres) by extending basic banking services that includes doorstep banking.
Striking a balance between digital presence and physical relevance, we have set out on to a transformational drive that will accelerate business growth while enhancing customer experience and adding delight to their digital journeys.
In this regard while expanding our digital and alternate channel footprint across our operational geographies, we also plan to strengthen our presence physically in rest of the country through strategic placement of brick-and-mortar outlets.
Q: How has Jammu and Kashmir Bank performed in Central Government schemes like Start-Up, Mudra Loans, and other schemes for industrial development?
A: As you know we see ourselves more as a developmental financial institution than a bank in twin UTs of J&K and Ladakh, therefore our main thrust remains to encourage and enable the unemployed youth to establish their own ventures and avail a range of benefits for start-ups under different GoI credit-linked schemes like PMEGP, MUDRA, and Start-ups etc. devised by the Governments at Union as well as UT level to meet the financial needs of youth especially women and persons belonging to SC/ST categories.
Pertinently, under Annual Credit Plan (ACP) for FY 2022-23, we surpassed the targets in PMEGP Scheme. Against the annual target of Rs 124.53 Crores and 1927 accounts, we lend Rs 1258 Crores to 20,986 applicants thereby achieving over 10 times on both the counts. Under PMMY i.e. Mudra Yojana, we provided finances to over 2.50 lac individuals involving an amount of more than Rs 5,500 Crore till March, 2023.
Similarly, under Stand-Up India Scheme which envisages that each branch of a Scheduled Commercial Bank shall provide loan of Rs 10 Lac to Rs 1 Crore to at least one SC/ST and one women borrower for setting up Greenfield Enterprise in manufacturing, services or trading sectors. Under the scheme we have lent 154 Crore to 809 entrepreneurs including women and SC/ST beneficiaries.
Going forward, I see more and more eligible, young and energetic entrepreneurs availing the requisite finance besides world-class digital banking and financial services from our Bank as the system has been geared fully to further build upon the momentum through well-instituted ease-of-banking procedures.
Q: How is the Jammu and Kashmir Bank helping youth in Self Financing Schemes? How many youth have been provided loans under these Schemes?
A: Being the lead Bank in twin UTs – J&K and Ladakh, we have always remained at the forefront of lending helping hand to the unemployed youth by providing them financial assistance under various Central and UT Govt. Schemes like PMEGP, PMFME (Prime Minster Formalisation of Micro Food Processing Enterprises Scheme) etc.
Notably, our Bank actively participated in various flagship programs of UT Government like Back to Village – 4 & My Town My Pride – 2 recently for spreading awareness about different Government sponsored schemes among the unemployed youth and encouraged them to set up their own units under these schemes. Out of all the banks operating in the UT, J&K Bank alone contributed to over 90%, during these programs, in generating employment for more than 92000 youth across J&K under different financial schemes involving an amount of over Rs 1100 Crore.
Besides, there are number of Government Sponsored Schemes under Mission Youth J&K like Mumkin, Spurring Entrepreneur Initiative, Tejaswini etc. for which Bank runs various campaigns using social media platforms, customer meets, print media, awareness camps etc. to inform and educate the youth about benefits under these Schemes. Pertinently, around 4,500 youth have been provided financial assistance under the various schemes of Mission Youth in J&K.
Q: When it comes to “Emotional Equity” – J&K Bank is a Brand that has remained close to hearts of people through generations, do you still see that connect between the People and its stakeholders?
A: Yes, that connect has deepened further and that is how we are growing. With public trust as the bedrock of our foundation, our fundamentals are very strong and get further reinforced with every improved performance like in FY 2022-23. We have made significant strides on each and every financial parameter.
Strong liability franchise, adequate capital, reduced NPAs, improved asset quality etc. are our core strengths besides liquidity, which is comfortably well above the regulatory levels. Moreover, we have also firmed up our corporate governance framework while improving the regulatory compliance.
In short, we are progressing ahead successfully to deliver on all our promises and to meet the expectations of all our stakeholders including the people of J&K.
Q: Besides creating direct and indirect employment opportunities for the youth, is there any proposal for the recruitment of the youth in the Bank in near future?
A: As you know, in 2021 and 2022, the Bank recruited around 1800 employees in both officer & clerical cadre in the UTs of J&K and Ladakh.
Regarding proposals to recruit people, let me tell you that all such proposals are linked to Bank’s future business plans. In this regard, we have engaged a globally renowned consultancy firm for rationalization of staff and preparation of future manpower plans. The project is at an advanced stage of completion.
However, for specialized jobs like Chartered Accountancy and expertise-oriented positions for C-Suite like CFO, CVO etc. we have hired people laterally and will continue to do so as and when required.
Q: A number of Banks are facing problems on account of NPA. Has J&K Bank made any improvement on this front?
A: Let me tell you that recovery in NPAs has been a very tough and challenging task for the Banks but due to efficient monitoring, proper follow-up and robust recovery mechanism, we were able to achieve asset quality figures that are the best ones in the last eight years.
Since strengthening the balance Sheet remained our priority, therefore, NPA reduction was one of means to achieve it. During the FY 2022-23, our gross NPAs improved remarkably to 6.04% as against 8.67% recorded a year earlier while as the net NPA figure reached 1.62% from 2.49%. The focus on further improving on the asset quality front and recovery of bad loans shall continue unabated.
Q: There have been some reports that Jammu and Kashmir Bank suffered huge financial loss due to escape of Vijay Malaya and Nirav Modi. If, yes, to what extent it has impacted the Bank?
A: Since we are the custodians of public trust, we always take care of our lending and ensure that it is secured by employing all the requisite regulatory provisions. Coming to your question regarding Nirav Modi, let me tell you that we have not given any loan to him.
Further, we had taken some exposure with the Kingfisher Airlines (Company promoted by Vijay Malaya) but the major portion of the granted loan has already been recovered from the sale of the underlying security i.e. shares of United Breweries (UB) and the outstanding exposure to the company is well below Rs. 20 crore which is fully provided for.
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