It’s additional responsibility: JKB
Srinagar, Jan 23: The J&K Bank on Sunday said that it is the banker to the government of Jammu and Kashmir since its inception and continues to be the same today and the general banking arrangements existing between the bank and the government shall continue in future as well.
The Bank issued a formal statement this evening in the backdrop of reports in local and national media in connection with the Reserve Bank of India’s (RBI) Supplementary Agreement under Section 21A of the Reserve Bank of India Act, 1934 with the Government of Jammu and Kashmir to carry on the general banking business of the Government of Jammu and Kashmir and to act as the sole agent for investment of Government’s funds.
“In terms of section 45 of the RBI Act, it is inter-alia provided that the Reserve Bank of India may appoint the national bank, State Bank or a corresponding new bank as its agent at all places or at any place in India for such purpose. The central government in terms of its notification dated 26th August 1972 directed that the Reserve Bank of India may inter alia appoint the Jammu and Kashmir Bank as its agent at any place within the state of J&K and subsequently initiated the process in Feb 1992 for appointing J&K Bank as its agent for transacting the general banking business of the central government including collection of taxes for and on behalf of central government. This banking arrangement in respect of central government businesses is in operation in the state,” the statement said. “J&K Government continues to be the main stakeholder with 53 percent equity holding. The arrangement between the state government and the central government or between J&K Bank and RBI or the state government in no way dilutes the status of state government or J&K Bank. J&K Bank has strong national presence and global recognition as 23 percent of its equity is held by Foreign Institutional Investors (FIIs).”
The statement said that the revised banking arrangement entrusted by RBI to J&K Bank to manage the general banking business of the central government and the state government is in fact the continuation of the existing arrangement.
“J&K Bank has recorded sustained growth in its operational spheres including the deposit mobilization, credit dispensation, profitability, NPA management, benchmark profitability, liquidity and other analytical ratios,” the statement said. “The bank apart from managing banking business of state and central government, has the privilege of being bankers of the country’s who is who in the corporate world both in the government and private sector. J&K Bank has a very vast scope for business mobilization both in the state of J&K and outside and has been drawing strategies in this regard on an ongoing basis by introducing tailor-made products and services.”
The statement further said: “We have in the bank various financial products for promoting and protecting the production, sustenance and livelihood across all sectors of the economy. Further the latest launch of the Seed Capital Fund Scheme under the auspices of Sher-i-Kashmir Employment and Welfare Programme For Youth (SKEWPY) envisaging a massive employment generation in the state, is another hallmark of the commitment of J&K Bank towards economic empowerment of the state. Given the speed in services of international standard, good quality appraisal practices in place and providing banking arrangement to the major corporates in the country, J&K Bank will achieve the targeted growth rate as per its business plans and strategies and will continue to perform better and better in the years ahead.”
The statement said the J&K Bank has efficient management of NPAs and the NPA coverage ratio of 95% as against the RBI’s stipulated benchmark of 70%, is one among the best in the industry. The thrust on quality assets and efficient management shall continue to remain a focus area.
“Meanwhile, as a direct consequence of the revision in the arrangement, all state departments, constituents of the state government shall necessarily have to maintain their official accounts with J&K Bank only. Through this arrangement RBI has, in a way, expanded the role of Bank in managing the banking business of the state government exclusively with the J&K bank and has entrusted the bank with more responsibility,” the statement said. “J&K Bank while carrying the general Banking business of the state shall continue to handle all kinds of receipts/payments of the state government, salary disbursements, pension to civil pensioners, social welfare payments, treasury payments etc. This is also in addition to responsibility entrusted upon the bank to manage general banking business of the central government at various places.”
Lastupdate on : Sun, 23 Jan 2011 21:30:00 Makkah time
Lastupdate on : Sun, 23 Jan 2011 18:30:00 GMT
Lastupdate on : Mon, 24 Jan 2011 00:00:00 IST
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