Concerns raised by RBI led to Parvez's removal: CS

Breaking silence over sacking of former J&K Bank chairman Parvez Ahmed, the state

Government on Wednesday said the decision was taken after the Reserve Bank of India (RBI) expressed concern over “governance issues” in the state’s premier financial institution.

“Let’s be very very clear that we haven’t acted against J&K Bank. The RBI gave us the letter that they are extremely concerned about governance issues in J&K Bank and these issues have been pending in spite of repeated requests from the RBI, and therefore we were forced to remove the CMD (Chairman and Managing Director) of the Bank,” Chief Secretary BVR Subrahmanyam told a press conference held by Governor Satya Pal Malik on achievements of his administration in the past one year.

The Chief Secretary said they have picked a J&K Bank official on seniority basis as interim CMD.

“It is not final but we will have a search committee and some of the best names in the country, ex-Governors of RBI have been spoken to,” said Subrahmanyam.

He said a three-member committee will be formed to pick the next CMD. The Chief Secretary said J&K Bank was the crown of the state. “It is shining glory of this state and therefore it is important that this Bank regains its glory. The ACB (Anti-Corruption Bureau) carried out raids as there were old complaints about irregularities and appointments. J&K Bank has a history, what and on whose recommendations people were being appointed,” he added.

He said there were written documents showing how people had been appointed under CSR.

“How do you appoint people under CSR in a bank? It can be done in a government. A bank is not an employment agency. A bank is first and foremost a bank and it is custodian of your, my and government’s money. And the primary responsibility of a bank is to take care of that money,” said the Chief Secretary.

He said a bank is not a charitable institution. “It is a misnomer. That is the fundamental objective from which the J&K Bank had moved away and that is what RBI meant when it kept on saying that there are governance issues with the Bank,” said the Chief Secretary.

Divulging details, the Chief Secretary said the J&K Bank has spent Rs 50 crore on golf courses under the CSR.

“My government gave it Rs 500 crore last year as capital subsidy. Is it the business of a bank, which requires government money to be operational, to spend Rs 50 crore on renewal of golf courses where less than 1000 people play?” he said.

“Please write about it…that it (golf) is an elite sport. There are people in disagreement with me at the top. Go and ask people in Downtown how many of them play in golf courses. The Bank has 80 lakh accounts. How many of them play in golf courses….spending Rs 50 core on restoration of golf courses is unacceptable for the Bank. Had it earned Rs 2000 core profit there will have been no question on that (spending on golf courses). But it is surviving on government money. I am saying this with full authority of the Governor that the Bank will be protected and it will be made a shining Bank,” said the Chief Secretary, adding the Bank will be run by people of J&K.

“We are interested in it becoming an internationally renowned Bank but be a bank first and bank last. Wait for three months and you will see results flowing from this Bank,” he said.

In response to a question, the Chief Secretary said the J&K Bank has no choice but to come under the RTI as it is a government-owned Bank and registered under the Companies Act as a Government Company.

The Chief Secretary revealed that the post of Chairman and Managing Director will be separated. “They will be on different committees so that Bank works under checks and balances. All systems should have accountability. This Bank is now moving in the right direction. Everybody’s money is safe. Let’s be very very clear about it. The Bank is healthy and it is in good shape,” he said.