Srinagar, September 4 (Scoop News) – Former chairman and chief executive of Jammu & Kashmir Bank M Y Khan today said that J&K Bank was established in 1938 and started its operations in 1939, it assumed significance when I took charge as chairman and chief executive of the bank in 1996.
Addressing a press conference in Srinagar M Y Khan said, it not only started witnessing unmatched growth in its fundamentals but with a big bang the bank expanded its network of branches in other states of the country and soon people outside the state recognized this small regional bank as one of the best banks in the country. Based on its sheer performance the bank earned status of a shining star and the only listed company of the J&K State.
Mr Khan said the bank diversified its operation in insurance and other sectors to turn its branches into super financial markets. For the first time in the history of the bank, emphasis was laid to build up the real estate assets of the bank and during this drive the bank constructed its own corporate headquarters at TRC Srinagar and acquired owned branch/ office premises for its operations not only in the state but in other parts of the country as well. Today the J&K Bank’s Corporate Headquarters building at Tourist Reception Centre, Srinagar, is a testimony of the tremendous unparalled growth which the bank has witnessed during my tenure.
That it was during my tenure that bank went public and floated the share in the market. Massive computerization was taken up anywhere banking was introduced a network of ATMs was created and debit and credit cards were introduced in the market. We also tied up with one of the largest insurance companies of the United States and started the insurance business and each branch was converted into a financial supermarket,Khan said.
He said that even as this performance of the bank during my tenure is undisputed, the consistent ‘distorted’ presentation of facts and figures while narrating the success story of the bank by my successor Dr. Haseeb Drabu, who resigned recently as chairman and chief executive of the bank, has ‘hurt’ my sentiments.
It is said that the tenure of Dr Haseeb Drabu has witnessed major focus on J&K State in which the bank in the last five years has raised its credit portfolio in J&K state from Rs.1200 crore in 2005 to Rs.12000 crore in 2010. This is a total lie as the credit portfolio as on March 2005 was roughly 5000 cr and not 1200 cr. It may also be mention here that during his tenure the overdraft to the government has witnessed almost a 100 percent increase which is reflected in the credit off take during his time, added Khan.
Subsequent to the Financial year 2003-04, in which the bank posted a net profit of Rs.406 crore, whole banking industry witnessed tremors of inflation and hardening of interest rates which besides impacting the yields also depreciated the investment portfolio of all banks. The banks all over the country witnessed a tremendous fall in their profitability. And J&K Bank could not remain insulated to these adversaries. But, despite all the adversities in the financial markets especially tremendous fall in the market value of the government securities, I could have easily booked a net profit of Rs.350 crore for the said financial year (2004-05). But I didn’t. I did a provisioning of Rs.250 crore in order to insulate the securities portfolio from future market risk and to reduce the duration of its investment portfolio. This I simply did for my successor so that he would be able to absorb the future market shock. Let me tell you that during that year no other bank in the country did provisioning for treating the government securities market to market. All other banks did the provisioning in the next financial year.
So, in simpler terms, I sacrificed my performance for the safety of the bank and the successor,he said.
To judge the performance of the bank during my tenure there are facts and figures available with everybody. Just compare them and you will get answer of your question. However, briefly I would say that when I took over reigns of the bank, the net profit was just 18 crore and it zoomed to Rs.406 crore in the year 2003-04. This means it increased by 23 times. As far profitability in 2004-05 is concerned I have already explained it to you earlier. Similarly, business turnover increased from Rs.4200 crore to Rs.37000 crore during my tenure. Credit portfolio witnesses an increase from Rs.1364 crore to Rs.11500 crore and deposits of the bank increased from Rs.2895 crore to Rs.21644 crore.
Let me also figure out the performance of the bank’s share at the stock exchanges. You will be surprised that the share price of the bank went up by 10 times during my tenure. In the year 1999 the share of the bank was listed and against Rs.38 (Rs.10 face value and Rs.28 premium), it reached to Rs.356 per share at the stock exchanges in the year 2005. This means an increase by almost 9 times of the original value. But during my successor’s period (2005 – 2010) the share price of the bank witnessed 1.25 times increase only which is well below the average performance of the bank shares during this period which increased by 3-4 times,Khan claimed.
I understand that government has decided to appoint Mushtaq Ahmad who was Executive Director and Director on Board of the J&K Bank at the time of his retirement in 2008. I think it is a good step. Mushtaq has worked with me and he has proved himself as an outstanding officer. I am sure he will use his experience and take the bank to new heights.