J&K Governor, Satya Pal Malik recently chaired State Administrative Council meeting and decided to turn the J&K Bank Ltd into a public-sector bank, taking its autonomy away and making it accountable to the state legislature.
He further said that the bank will also be brought under the ambit of the J&K RTI Act and the Central Vigilance Commission.
J&K Bank is classified as an ‘old private sector bank’ supervised by the Reserve Bank of India and it is also subject to oversight by the Comptroller and Auditor General (CAG). The J&K state holds a majority or 59.3 per cent stake in the bank.
In a recent statement, J&K Director, Press and Information, said, “As the state is a major shareholder in J&K Bank Ltd, a need was felt that it should have a character of a PSU which is subject to general supervision and access for enhanced transparency in the transaction of its business to promote trust.”
“The purpose is not to question the day-to-day activities of the bank management but a step towards strengthening better corporate governance,” the statement said.
J&K Bank is a listed entity and earned profits of Rs 440.90 crore on a total income of Rs 7,116.71 crore in 2017-18.
The bank’s shareholding pattern, as on September 30, 2018, shows that individual investors hold about 12.5 per cent, mutual funds 5.36 per cent, foreign portfolio investors 16.17 per cent and LIC 2.76 per cent.
J&K Bank enjoys a pre-eminent status in the state and has played a key role in promoting local business and industry.
Both NC and PDP see this decision as chipping into the autonomy of institutions that the state enjoyed.