Merger of RRBs in J&K on cards

Greater Kashmir

Jammu and Kashmir Bank is carving out ways and means to merge its two sponsored Regional Rural Banks – Kamraz Rural Bank and Jammu Rural Bank. This is being done following the orders of the union finance ministry wherein merger of regional rural banks has been directed.
Both Kamraz Rural Bank (KRB) and Jammu Rural Bank (JRB) have a wide network of branches located deep into the rural areas of the State. The merger of these rural banks is going to strengthen the mission of bridging the critical gap in meeting the credit needs of the rural poor.
While confirming the merger of KRB and JRB, the Chairman and Chief Executive Officer of the JK Bank, Dr. Haseeb Drabu, said, “We will have to do that. There is no choice. We will workout modalities of the merger and after that we will improve their operations. Actually, we are going to convert them into a microfinance institution.”
The socio-economic conditions of a majority of rural population continue to be cause of concern for policy makers. In view of the capacity of the Regional Rural Banks (RRBs) to meet small-value, large-volume rural credit needs, the policy makers stressed that the time has come to revatilse / revamp the structure of these rural finance institutions. They believe that this can make them to play a critical role in achieving the developmental targets in the rural sectors.
Policy pronouncements by the governments continue to be largely agriculture and rural centric. Rural credit is emerging as focal issue. Despite a wide network of bank branches, a critical gap still exists in meeting the banking requirements of the rural people in the State.
The JK Bank has taken initiatives to take banking to the doorsteps of the rural masses, particularly in areas without banking facilities. The bank is carrying its mission of making available credit to weaker sections of the society at affordable rates. Rural savings are mobilized and canalized for supporting productive activities in these areas.
Precisely, having grass root level understanding of the complexities of the agriculture and rural sectors, the bank has been enthusiastically helping the rural masses to grow. “The products and services shall be designed as per the requirements of the area so that economy of these areas is reshaped for the overall prosperity of the masses.”
Today, in banking industry it is accepted wisdom that business is dependent upon meeting the needs of a wide variety of stakeholders including customer groups and community at large. Fundamentally, bank profits arise from managing the time value of money. This is an abstract concept, not easily understood by those who are not familiar with finance. In the past people have tended to be in awe of that which they do not understand. Today, people question heavily that which they do not understand. Consequently, it is in everybody’s interest, including the banks, to ensure that people understand financial needs, products and services, pointed out an expert.
While welcoming the initiatives of the bank, planners say: “We have come to a long way from the days when banking was really only available to wealthy. Banks have a social responsibility and it is essential to take steps to reduce the proportion of people who do not have bank accounts.”
In the words of Dr. Haseeb Drabu, the huge level of poverty in rural areas was preventing the commercial banks to move into these areas. “Now the situation is not like that and lot of money is in rural areas and banks can make profits there also. The strong initiatives of government for development of rural and disadvantages areas have created more interest for the banks to venture into these areas. Agri business is evolving, agri houses are coming up. So we have to provide for that.”
The bank is coming up with a basket of products which shall be suiting to small businesses, small entrepreneur, shopkeeper and other customer segments in the areas.
The Bank is all set to launch its Financial Inclusion project in Ganderbal block. Village level workers block functionaries municipal councilors and bank officials gave final touch to the plan. The bank officials shall be going from door to door to open accounts of the people. MetLife too has joined the venture as they shall be offering tailor-made insurance products to the customers. It is notable that such project is in full swing in R S Pura block.
“It is not accepting of deposits alone. We shall be also meeting credit requirements of the people after opening their accounts,” says Dr. Drabu.
The bank has a mission to introduce cashless transactions in the J&K State. “Up to June this year, we will ensure that every transaction is conducted through cheques or through plastic cards at least in one of the panchayats. In this situation we shall be giving advance to a small shopkeeper interest free and he shall be lending it forward to his customers. Basically we shall be establishing a network where the cash does not flow out of the JK Bank’s network. So a society of transactions will be totally cashless,” said the chairman of the Bank.
Meanwhile, entry of new private sector banks in the State is no worry for the bank. Dr. Drabu says: “It is good that new private sector banks are making way into the State. I do not think it is a competition for us. One or two branches that too in a city cannot compete. Historically we have seen that these banks don’t lend here. Their branches are, by and large, deposit branches. But they can become a benchmark for us in service culture. So it is a good thing that has happened here.”