Srinagar, Aug 27: A day after the Jammu and Kashmir government asked the chairman of Jammu and Kashmir Bank, Dr Haseeb Drabu, to step down, the state’s top-notch economist put in his papers before the Board of Directors on Friday. The Board has approved the resignation.
In a chat with Greater Kashmir, Dr Drabu confirmed that he had tendered his resignation and sought to be relieved from all responsibilities of the Bank. “As I leave the bank after serving it for five years, I feel I am leaving the organization in a stronger and better position than when I took over as its chairman,” he said, categorically refusing that he had any regrets over the resignation.
Asked if he had any clue on why he was asked to resign, Dr Drabu said, “Government must have something in mind. I was asked to resign, so I did. I didn’t ask for any explanation nor do I feel it is appropriate to do that.”
In response to a question on whether it was the regime change that led to his resignation, Dr Drabu said, “There have been many regime changes. I have been the chairman for the last five years. There have been two regime changes and I have continued. So, I do not think there is any thing to do with the regime change.”
Sources said Dr Drabu put in his resignation at around 11 AM on Friday. The resignation came immediately after the commissioner/secretary, Finance, Sudanshu Panday reached the Bank Headquarters at Dalgate and looked for Dr Drabu, who was on way to the office. It has been reliably learnt that the state government had asked Panday to replace Dr Drabu, though it was not permissible under rules.
As Dr Drabu’s news made the headlines of online versions of different local and Delhi-based dailies, sources said he received a volley of telephone calls from various political and banking quarters in different parts of India.
Reliable sources said the Prime Minster’s Office too called Dr Drabu and inquired about his resignation. Following this, they said, Dr Drabu received a call from a deputy governor in the Reserve Bank of India, who inquired the same thing. Later, the sources said, a joint secretary at the Union Finance Ministry also rang up Dr Drabu over the issue.
Sources said following Dr Drabu’s resignation, the Board of Directors is exploring at least three options with regarding to running the affairs of the J&K Bank. The options include formation of a committee to run the Bank till its full-fledged chairman was appointed, handing over the charge to Finance Secretary, Sudanshu Panday till further orders and immediate constitution of a search committee to appoint the Bank chairman.

BACKGROUND
In an unexpected move, the state government had Thursday evening asked Dr Drabu to step down, without citing anything. The development came immediately after the government, in a cabinet meeting, ordered a major reshuffle in police and bureaucracy. Dr Drabu’s resignation issue, had, however, not come up during the meeting.
Pertinently Dr Drabu had offered to put in his papers soon after Omar Abdullah took over as J&K’s chief executive in 2008 but Omar had asked him to continue. However, he resigned as state’s economic adviser paving way for retired IAS officer Jalil Ahmad Khan to take over. The top notch economist from Kashmir had taken over the state’s only listed company after Muhammad Yousuf Khan completed his tenure after the PDP government took over in late 2002.
J&K Bank’s business has tripled during Dr Drabu’s tenure and the bank was aiming at Rs 1,000 crore profit by the next fiscal. During his tenure, the profitability of the Bank has shot up five times from Rs 100 crore in 2004-2005 to Rs 512 crore in 2009-2010. In June this year, J&K Bank achieved the distinction of being the first zero NPA bank in the country. As per rating agencies, J&K Bank is rated as one of the three most stable bank’s in India.
Earlier, during the peak of the crisis state government had asked the J&K Bank not to keep its branches open on the days when separatists were keeping the markets open.
Dr Drabu whose contribution to his home state was increasing the credit flow to Kashmir from Rs 1200 crores in 2005 summer to Rs 12000 crores in 2010 was facing a lot of music for “filling the belly” of the people. He has single-handedly faced the challenge and ensured that J&K bank is permitted to function the way all other banks function across India.

DR DRABU THANKS ALL
In his resignation letter, Dr. Drabu thanked employees of the Bank, Board of Directors, Foreign Institutional Investors, state government, the regulatory authorities and all other stakeholders for giving him the support and cooperation to run this institution along professional lines.
Addressing the management and employees of the bank at Corporate Headquarters auditorium, Dr. Drabu said, “For me its institution that is important and not the individual. I leave with the satisfaction that I have worked for the last five years with integrity and the best of my competence. I am leaving with satisfaction that the bank today is stronger and better than when I took it over.”
“I think we have transformed the bank from a good institution to a great institution. This has not been possible just because of me, but of course, it’s because of the employees of the bank”, he added.
Expressing gratitude for being part of the bank, Dr. Drabu said, “As I have said in my resignation letter that professionally it has been a privilege for me and personally a great honour to be a part of this institution, perhaps the most remarkable institution of the state.”
In his last remarks Dr Drabu emphasized upon the employees of the bank to support his successors so that the bank continues on the path of progress and success.
Dr. Drabu was given a warm send-off that included a standing ovation with a loud round of applause. The mood in the auditorium turned melancholic after he delivered his remarks and left the dais.
Also present on the occasion, Mr. Shahzad Ahmad Teli, President All Indian J&K Bank Officers’ Federation, expressed deep gratitude to Dr Drabu for his remarkable contribution in transforming the bank into the most outstanding institution in the state.
“The most valuable contribution that Dr. Drabu has made in the success story of J&K Bank shall always be remembered with deep affection and respect”, he said.

SHARES FALL
Immediately after the J&K Bank chairman, Dr Haseeb Drabu tendered his resignation, the bank shares witnessed “intense selling pressure.”
The Economic Times reported shares of Jammu & Kashmir Bank were witnessing intense selling pressure after J&K beleaguered Chief Minister Omar Abdullah asked the state’s top notch economist, Haseeb Drabu, to put in his papers as chairman of the J&K Bank, the state’s only listed company.
”At 11 am, the stock was at Rs 798.90, down Rs 50.95 or 6 per cent on the NSE. It touched a high of Rs 845 and low of Rs 793 in trade so far. Around 1.26 lakh shares were traded in the counter,” the daily reported. “Drabu’s reign as the chairman of the J&K bank witnessed credit flow to Kashmir jumping from Rs 1,200 crore in 2005 to Rs 12,000 crore in 2010. Profit surged from Rs 100 crore to Rs 512 crore and it was expected to reach Rs 1,000 crore by the next fiscal. It is one of the rare zero NPA banks in India besides being one of the top 100 companies.”
At the closing of the markets, the day’s J&K Bank stock on the NSE was Rs 789.35, witnessing a fall of Rs 60.50 per share. Similarly at the BSE, the Bank stock at closing stood at Rs 789.75, witnessing a fall of Rs 58.95.
 Banks market cap eroded by Rs 285 crores on Friday. Analysts suggested that it was likely to tumble further on the weekend.

‘STATE IN TOUCH WITH RBI’
Meanwhile, a government spokesman said state government in consultation with RBI will make necessary interim arrangements for the smooth functioning of the bank till the RBI appoints a successor. “It would be ensured that there is complete continuity in the management of the affairs of the bank and growth and profitability will not be allowed to suffer. The bank has enough depth at the leadership level comprises of two executive directors and eight presidents who will continue to manage the bank,” he said in a statement. “Various stakeholders of the bank especially foreign institutional investors who have large holdings in the bank, should be rest assured that the bank will continue to record exemplary performance under the new leadership and there is no cause of any concern whatsoever.”

Lastupdate on : Fri, 27 Aug 2010 21:30:00 Makkah time
Lastupdate on : Fri, 27 Aug 2010 18:30:00 GMT
Lastupdate on : Sat, 28 Aug 2010 00:00:00 IST