By: Javaid Beigh
SRINAGAR: Jammu & Kashmir Bank Ltd. (J&K Bank) is one of the most iconic institutions of J&K state, something that everyone in all three sub regions of Kashmir valley, Ladakh and Jammu, is immensely proud of. It is a great unifier in an otherwise ethnically, religiously and politically diverse state. The bank however has been in news off late for all wrong reasons.
The removal of the chairman of the J&K bank on charges of professional misconduct has put the spotlight on the systemic malaise that has been plaguing the bank for a long time. Additionally, some of the recent moves by the administration of Governor Satya Pal Malik geared towards the “cleaning” the J&K bank and making its working more transparent and accountable has acquired political and communal colour in certain quarters of the state.
But what exactly is all the noise emanating on J&K Bank all about?
To begin with, consider the plethora of allegations, which are part of investigations by J&K’s Anti-Corruption Bureau (ACB) against Parvez Nengroo, the sacked chairman of J&K Bank. These include – appointing his nephew on a “special post” in his office immediately after his appointment as chairman of J&K bank in 2016; appointing his daughter in law as a “probationary officer” with J&K Bank; posting two other close relatives to his office; appointing two additional relatives to control HR and Board affairs of J&K Bank; allocating Rs. 8 crores under Corporate Social Responsibility fund meant for social causes serving poor people towards the “beautification” of Royal Spring Golf Course; using his own house and that of his wife in Shopian and Pulwama as “bank branches” and thereby collecting hefty rents on them; giving lucrative insurance contract on behalf of J&K bank to a Japanese bank, where his sister’s son works; knowingly releasing hefty overdrafts and loans to habitual defaulters of other banks, which eventually turned bad; entering into “one time settlement” with few influential and selective defaulters allegedly for “kickbacks”- these and many more such allegations are part of investigation by ACB against Nengroo, which have been widely reported in all major journals of Kashmir valley and national media.
The professional misconduct of Parvez Nengraoo, however does not take into account other brazen and shameless and totally corrupt manner in which J&K bank guidelines and standard operating procedures were ignored to carry out unmeritorious appointments of close relatives and sophisticated loot and plunder of J&K bank’s money by influential businessmen, beaurocrates and politicians of nearly all parties in connivance with corrupt officials of J&K Bank for seeking heavy loans and overdrafts, almost none of which was ever repaid.
This is such a pathetic fall of an institution that has always been a pride of the people of J&K. The J&K Bank was established in 1938 by erstwhile Maharaja Hari Singh and has since than acted as a banker to J&K government and the lender of the last resort (just as RBI acts as a banker to Government of India and other Indian states). Unlike other government owned banks of India, where the central government is the major shareholder, J&K bank is the only unique bank in India where state government is the majority shareholder.
Technically, J&K bank was first listed as “old private sector bank” and later registered as a “government company” with Registrar of Companies, Jammu, all of which meant that J&K bank remained under loose supervision of RBI and oversight of Comptroller and Auditor General. Unfortunately, however, this arrangement actually did not serve J&K Bank well as it remained mostly immune from organizational and operational reforms that were carried out in other government banks all across India. The side effect of this rather vague ownership of J&K Bank meant total lack of transparency, nepotism, corruption and misuse of the bank’s resources, all of which was further aggravated by the fact that J&K bank with 14,000 posts is the largest employer of J&K and appointments in the bank have been systematically reduced to a shameless spectacle of corruption, cronyism and nepotism. The controversial question however is that many people in J&K including some well-known economists, former finance ministers and politicians try to defend all this loot, plunder, corruption, chaos and nepotism under the tag of “institutional autonomy”.
In November last year, the state administrative council under Governor Satyapal Malik approved the proposal to make J&K Bank a state Public Sector Unit (PSU) and thereby make it accountable to the J&K state legislature. But, after strong protests were made by politicians about the so called “attack” on institutional autonomy of J&K Bank, the said proposal with withdrawn.
However, as details of the brazenness of Parvez Nengroo’s professional misconduct became known, the arguments to save “institutional autonomy” of J&K bank fell flat as those who defend the bank’s status quo mostly belong to rich, feudal and elite section of Kashmir valley, who benefit immensely from this broken-down system. None of their “economically sound” arguments could hide their self-interest behind their “defense” of so called “institutional autonomy” of J&K Bank. Further, their attempts to color the removal of Mr. Nengroo and appointment of Mr. Chibber from Jammu as “communal design” of Governor’s office on the lines of “Jammu versus Kashmir” and “Hindu versus Muslim”, didn’t find many takers from Kashmiri Muslim community, who were shocked and aghast at the scale of mess under Parvez Nengroo’s mismanagement.
And all this comes on the back of dire financial condition of J&K bank, which declared a massive loss of Rs. 600 crores in the quarter that ended September 2011-17 forcing the state government to infuse Rs. 532 crores to save the bank.
Therefore, in light of these developments, the last week’s decision of board of directors of J&K Bank to bring the bank under the purview of RTI Act and CVC guidelines is a welcome step, which will go a long way in bringing the much needed transparency and accountability in the working and operations of J&K Bank.
