J&K Bank obscuring the Truth: There’s more than meets the eye


In the recent budget announcement, J&K Finance Minister Mr. Haseeb Drabu informed about the poor financial health of the J&K bank. The Minister admitted that the bank was facing governance deficit and management failures for years leading to an increase in its Non-Performing Assets (NPAs).

There’s no information on who benefited from the hefty loans which led to an increase in NPAs that stand at a massive 6000 Cr. Mr. Drabu said in his budget speech that the bank had to declare a huge loss of 600 Cr for the quarter ended September 2016-17, and thus made equity infusion of Rs. 532 Crore. If relief is denied to a small shopkeeper amid unrest in the valley, how can the Govt. gift taxpayer’s money to the bank to recover its debts?

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Also, the J&K bank has never disclosed the list of recruitments to public, neither has it disclosed their merit list. Rumours say that the bank made 400 backdoor appointments but no one has been able to get an access to the facts and numbers.

In a country where Reserve Bank of India, topmost financial institution is open to queries under Right To Information Act, the J&K bank has been obscuring every information that citizens have the right to know.

Amidst this silence and immoderate secrecy, former Chief Information Officer, Mr. Ghulam Rasool Sufi divulged certain information  that suggest there’s more than that meets the eye in the present state of affairs. He alleges that authorities made careful efforts to keep J&K Bank out of the scope of the RTI and justify their obstinate stand on not to be transparent. He says that the ruling PDP-BJP coalition as well as the opposition, National Conference, is silent over the “death” of RTI in the state.

“For last sometime concerned residents of J&K are worried and perturbed on the performance of J&K bank ; a financial institution of repute which was showing profits as against number of so called public sector undertakings which are consistently running on losses.

These apprehensions stand now confirmed by the frank admission of finance minister Mr Drabu and the current chairman of the bank. the main reason (see today’s greater Kashmir) attributable to the downslide of the bank is non performing assets.

The J&K bank not only used to cater to small businesses of J&K but had also attracted the imagination of small investors of J&K particularly from valley depositors. The governments of the day whether it was National conference- congress or present dispensation of PDP -BJP and the earlier management saw to it that the affairs of the bank remain a guarded secret from public.

Even in this age of transparency and accountability people are debarred for having even minimum information about working of the bank. Immediately after NC- Congress government took laudable step of bringing a strong transparency law in the state, a few enthusiastic J&K information seekers had jointly invoked their right to information and sought some information from the bank which was refused to them point blank on the plea that J&K bank was not a public authority hence not under the purview of J&K state RTI ACT.

The matter ultimately landed in the state information commission .Keeping in view the important question of law to adjudicate whether J&K bank was a public authority and thus liable to be transparent. I as the then CIC of J&K state RTI Commission constituted a full bench to adjudicate the issue. The bank stoutly denied its liability under the Act and engaged one of the best legal minds of the state to justify their obstinate stand not to be transparent.

The commission heard the bank in several sittings and before drafting the order I not only studied the legal position but searched the archives in Jammu archives and found the establishment of the bank was one of the golden achievements of Maharaja Hari Singh who had personally persuaded some sincere rich people of the state to become shareholders along with the state government. The Maharaja had undertaken personally where the bank office should be, who would be manager of bank (presently chairman) allotted the land and with his deep involvement the bank was established.

Thus the late Maharaja Hari Singh was really acting as an independent ruler who was sincerely interested to establish a state bank of the state. after making a deep and painstaking study of the issue , placing reliance on Maharaja’s proclamations, the Indian companies act , various supreme court and high court decisions and analyzing state governments administrative control, it’s more than fifty percent capital contribution the commission declared the bank to be public authority and liable to disclose the information as permissible under the RTI ACT and directed bank to comply the order within stipulated time.

The bank took no time to challenge this unanimous decision of the commission in the J&K high court. Initially the matter was heard in the court of the then honourable justice Hassnain Masoodi who refused to grant any stay but ultimately the bank was granted stay by some other honourable judge .4 years have elapsed the stay continues , though the information sought was not only relevant for the permanent functioning of the bank but also of the time bound nature that is to say the disclose of the said information has lost the relevance.

It was painful to observe that most of applicants from Kashmir valley mysteriously disappeared from the scene They were initially enthusiastic to get the information but did not pursue the proceeding in the honourable high court .The honourable supreme court has in certain decisions declared banks including reserve bank of India to be liable to disclose the information under the RTI act .

One of the reasons for present state of poor financial health of the bank is much guarded secret functioning of the bank , the political interference which has kept under wrap the liberal ,reckless and thoughtless sanctioning of loans to non state subjects some of the borrowers have been allegedly friends of politicians.

Certain loans have been sanctioned for establishing businesses but allegedly used for erecting huge residential building without any check by bank .Sometime back I had accidental brief interaction with the important politician of present dispensation and had suggested that J&K bank be advised that notwithstanding the bank stand that it’s not under the purview of J&K state RTI Act let the bank voluntarily declare to disclose information sought by residents of state on any point of information as decided by bank and reserve its right not to disclose information on few points.

This practice has been followed by number of non governmental institutions outside the state who are not strictly falling under the transparency laws.

This suggestion obviously and understandably fell on deaf ears. I, not in the capacity of former CIC but as a concerned citizen and an account holder and shareholder of J&K bank make humble and respectful appeal to the honourable chief justice of J&K high court to fix the hearing of J&K state information commission decision declaring the bank a public authority I would also request civil society to think whether it can become an intervenor in the case and approach the honourable chief justice J&K high court with a request to decide the issue at an earliest. It’s nobody’s case to claim that the transparency law is the only remedy for restoring the financial health of J&K bank but it would have definitely acted as a deterrent to curb number of acts of financial indiscipline and curtail the unbridled discretion of the management and political interference.”