Excelsior Correspondent
JAMMU, Dec 15: State-owned Jammu & Kashmir Bank today posted a net loss of Rs 602.40 crore for the second quarter ended September 30.
However, the bank had posted a net profit of Rs 195.62 crore in the corresponding quarter of the previous fiscal.
“Total income has decreased to Rs 1,816.67 crore for the quarter ended September 30, 2016 from Rs 1,847.84 crore in the same period of previous fiscal,” the bank said.
The bank was to announce the second quarter results on November 12, however, it had to postpone it to a future date in view of political unrest in Kashmir valley that time.
It has requested SEBI for grant of extension in the stipulated 45 days timeline for submission of the second quarter results as well as waiver of penalty for delay in submission beyond the time limit.
Besides, the bank had approached the RBI for a special dispensation addressing these concerns and had said that it was not been able to finalise bank’s financials for the July-September quarter.
Stock of the bank closed 0.73 per cent down at Rs 60.80 a share on BSE today.
Commenting on the numbers, Parvez Ahmed Chairman & CEO J&K Bank said that the Bank with the unrelenting commitment and support of the State Government, will pass this challenging phase as the Brand Franchise of the Bank is intact and the captive business base in J&K State is its core strength.
The Bank, he said, has posted total business of Rs. 117438 crore with CASA ratio of 45% and healthy NIM of 3.37%.
Briefing about losses of Rs 602 crore during the Quarter under review, Parvez strongly advocated his policy of Clean up, Consolidation and Transparency backing the same with the fact that the Bank’s Board in cognizance and anticipation of emerging economic environment preferred to make adequate provisions resulting in improvement of NPA coverage ratio by 400 bps over previous quarter.
The increased provisions are largely on account of fresh slippages, restructuring and under-provisioning of earlier periods.
On the business strategy, he said it was clear that “we need to orient our business towards a direction that not only catalyses growth in the State but also delivers best possible returns on the equity”. As a consequence, he said, during the cleansing and consolidation phase “we will continue to sharpen our business model by focusing on business within the State where we have stronghold positions besides capitalizing on available growth opportunities in rest of India by rebuilding Corporate Loan book and desired impetus to SME / Retail sector growth”.
Meanwhile, providing relief to the borrowers across the State, who suffered due to prolonged disturbances in the Valley, J&K Bank today rolled out a comprehensive loan restructuring package for them.
Announcing the package, Parvez Ahmed said, “This is the time to hand hold our customers and provide them the much needed impetus to put their businesses back on the path of recovery and growth.”
“The rehabilitation package was adopted by the Board of Directors of the Bank in a meeting held today,” he added.
The package was finalised after Reserve Bank of India (RBI) gave its approval to the J&K SLBC proposal of restructuring the loans of affected borrowers stressed due to the recent turmoil.
The Chairman further added that the package was customized to not just alleviating the pain of our borrowers by providing the repayment holiday with reduced interest burden but with the provision for additional need-based working capital finance.
“The Bank has tried to ensure that the whole process is made hassle free for the borrowers whose businesses have been derailed by the long spell of disruption in the valley”, he said.
The Chairman conveyed his gratitude to the State Government, RBI and the business community who wholeheartedly supported the efforts of J&K Bank as Convener SLBC to provide the much needed rehabilitation package necessary for the revival of businesses in the State.
Notably, the J&K SLBC adopted the package as conveyed by Reserve Bank of India in consonance with the RBI Master Directions on Natural Calamities and asked the member Banks to frame their individual packages for restructuring of loan accounts of affected borrowers.
Discussing the operational details of the package, Parvez said that the Bank shall fund the interest due from the borrowers while deferring the principal repayments in the loan accounts upto a maximum period of 18 months, till December 2017.
Besides, the bank has also substantially reduced the rate of interest to be charged during the repayment holiday on interest funding to 9.5% per annum, he added.
Additional finance, he said, will be sanctioned to affected borrowers upto a maximum of 20% of their existing limits at concessional rate of interest. The farmers, who have suffered losses to their crops to the extent of 33% or more, are also covered in the package.
The package shall be applicable till February 2017 in accordance with the RBI approval and the borrowers can avail the benefits of the relief package during the applicable period from their respective branches.
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