Showing posts with label Bank. Show all posts
Showing posts with label Bank. Show all posts
RBI new debt manager for J&K
‘Decision to put state government in a tight position in long run’
BILAL HUSSAIN
The Reserve Bank of India, Central Bank, has entered into a supplementary agreement under Section 21A of the Reserve Bank of India Act, 1934 with the Jammu and Kashmir government to carry banking business of the state government. Experts here oppose the agreements and term it long run ‘economic subjugation’.
The agreement shall be effective from April 1, 2011. “The Reserve Bank of India shall carry on the general banking business of the government of Jammu and Kashmir and act as the sole agent for investment of government’s funds,” a handout of the RBI said.
According to the sources it was on the recommendation of the state government, that the Reserve Bank of India has entered into an agreement with J&K Bank Ltd. whereby J&K Bank —state’s premier financial institution— would act as an agent of the Reserve Bank of India, for conduct of general banking business of the state government.
The RBI in a statement said, “The Reserve Bank of India has already been acting as a debt manager to the government of Jammu & Kashmir pursuant to an agreement entered into with the state government under Section 21 A of the Reserve Bank of India Act, 1934, with effect from September 1, 1972.”
However, contradicting its own statement, the RBI website said that the state government transactions are carried out by RBI in terms of the agreement entered into with the state governments in terms of Section 21 A of the Act. “As of now, such agreements exist between RBI and all the state governments except with the Governments of Jammu and Kashmir and Sikkim,” it mentions.
The Chairman and Chief Executive Officer of Jammu and Kashmir Bank, Mushtaq Ahmad told Kashmir Times that The J&K Bank acts as an agent of RBI for conduction of general banking business of the state government and for other related matters. When asked if they have any communication from the state government, Mushtaq Ahmad said, “As of now we haven’t received any formal communication from the state government about the same.”
Noted economist of the state, Professor Nissar Ali told Kashmir Times that the existing system was the unique route available to J&K government only. “It used to provide comfortable position to the state to get overdraft from J&K bank and to bridge the mismatches on account of funds as it takes time for the state to receive funding from New Delhi,” he added.
At present J&K Bank provides an over draft of about Rs 2300 crores to the J&K government. Prof Ali believes that the present move would put the state government in a tight position in lthe ong run, as “ours is a resource deficient sate, so revenue flow is too little”.
According to Prof Ali, the agreement for J&K Bank would mean an immediate short run problem. “The bank is in pressing need to look for the ways to deploy Rs 2000 crores in one go,” Prof Ali added.
The agreement, according to well informed exerts on the matter said that it would push the state toward ‘total dependence’ on New Delhi and terms it ‘economic suppression’.
PDP lambasts NC’s move
Reacting sharply on handing of the general banking business and conceding debt management of the state to Reserve Bank of India (RBI), Peoples Democratic Party (PDP) in a statement has said this is the latest and most lethal nail in the coffin of state’s autonomy by National Conference (NC). The party president Mehbooba Mufti has said, “the decision removes the last fig leaf that the ruling party tried to cover its real intentions and duplicity with.”
“The decision is an enslaving mechanism for the state government that is already reeling under the economic deprivation and begging bowl syndrome caused by the sell out of resources by successive NC governments,” party president PDP said.
“J&K Bank is not only a flagship financial institution of the state but it represents the ability of our professionals to script great success story” she said expressing her apprehensions that the new arrangement could be the first step towards its liquidation as a state owned company.
The PDP president said while NC’s autonomy resolution never made its way out of the then ally L K Advani's shredder, on ground the party seems to be doing everything to further surrender whatever had remained of it. That becomes evident from the clear RBI statement that the decision was taken at the request of the state government.
Blasting NC for its repeated blunders, she said, “while the historic U-turns and lack of vision of the NC ensured that intellectual growth was stunted, Farooq Abdullah settled the natural resources debate forever by handing over the most feasible power projects to NHPC.”
“And now Omar seems to be dedicated to give up the remaining,” she said, and feared that the banking changeover could prove a huge setback to the state in terms of achieving self sufficiency and economic self sufficiency.
Mehbooba said NC's political history can hardly boast anything by way of institution building, but J&K Bank was perhaps the only prime institution that professionals from the state developed and could be proud of. Not only would the viability and growth prospects of the bank be restricted by this decision, she said there was no doubt that state’s financial position would be massively compromised.
Banks too have social obligations
BILAL HUSSAIN
Since June this year, Kashmir on political front witnessed curfews, protests, and civilian killings while on economical side there was a decrease in imports, migratory labor outflows and livelihood of daily wagers got hit. Despite several odds banks—financial intermediary that accepts deposits and channels those deposits into lending activities— in Kashmir could manage some profits.
The banks here are making profits during unrest but at what cost? I believe social, which is not fine. By taxing denizens of the valley, who are already financially strained, due to continued market closures barring few days is an act of profiteering.
Besides, focusing profit banks in Kashmir both public and private sector have social obligation to meet, as they are bestowed with several privileges, especially of seeking public deposits. The banks operational in the valley are well aware of the fact that the small business, daily wagers are the worst sufferers in the recent unrest. This segment of the society should be given interest relief, if not full debt waiver.
However, instead banks have started calling businessmen and traders here asking for Equated Monthly Installments (EMI): fixed payment amount made by a borrower to a lender at a specified date each calendar month, it is used to pay off both interest and principal each month. While, traders here maintain that due to the prevailing unrest their cash flow has got hit and demand interest waiver.
The Jammu and Kashmir Bank, the premier financial institution of the state, is seeking business chambers, traders and industrialists view on the same. While, public banks here have already started process for interest waivers. Senior Official, in State Bank of India, Kashmir recently told me that the bank is considering advance cases for interest waiver. “We are in progress of considering the waivers depend up on case to case,” he said, “Branch managers have been given power of deciding about the case and sending same to the controlling authorities for necessary actions.”
Other small private players in the state like HDFC Bank, YES Bank, Axis Bank, ICICI Bank and many more too should take a cue and look for possibilities of interest waivers.
The decision on the waiver is not something, which the banking regulator, Reserve Bank of India, would allow, in fact there are well laid down guidelines for it. The Reserve Bank of India has clearly laid down guidelines for the banks on loan waiver during civil unrest. The RBI master circular on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances the principle for utilisation of floating provisions by banks are well laid down.
According to the RBI master circular, “The floating provisions should not be used for making specific provisions as per the extant prudential guidelines in respect of non performing assets or for making regulatory provisions for standard assets. The floating provisions can be used only for contingencies under extraordinary circumstances for making specific provisions in impaired accounts after obtaining board’s approval and with prior permission of RBI. The boards of the banks should lay down an approved policy as to what circumstances would be considered extraordinary.”
To facilitate banks' boards to evolve suitable policies in this regard, it is clarified that the extra-ordinary circumstances refer to losses which do not arise in the normal course of business and are exceptional and non-recurring in nature. These extra-ordinary circumstances could broadly fall under three categories viz. General, Market and Credit. Under general category, there can be situations where bank is put unexpectedly to loss due to events such as civil unrest or collapse of currency in a country. Natural calamities and pandemics may also be included in the general category. Market category would include events such as a general melt down in the markets, which affects the entire financial system. Among the credit category, only exceptional credit losses would be considered as an extra-ordinary circumstance, circular mentions.
To mention, the Valley has been witnessing protests since June, which left 112 people dead in the police and para military firings.
RBI tightens credit off take, deposit rates to go up
BILAL HUSSAIN
The Reserve Bank of India (RBI), central bank, on Thursday took a step of hiking the key short-term lending rate which is expected to contain the rising inflation. Bankers here believe that the move is expected to raise the deposit rates.
The repo rate, the rate at which our banks borrow rupees from the central bank, is raised by 25 basis points (bps) to 6 per cent and reverse repo rate, rate at which RBI borrows money from the banks, has been hiked by 50 bps to 5 per cent with immediate effect.
The decision has been guided by the need to contain inflation, which is currently at 8.5 per cent (food inflation has touched 15.10 per cent), as a hike in rates will lead to a rise in cost of funds for banks and will make loans expensive. This, in turn, will reduce consumption.
While another banker said, "Till September 30 most of the banks would hold on to the interest rate. After that there might be a pass on effect to customer."
The RBI wants deposit rates to go up as there is a need to make the real interest rates, the difference between inflation and deposit rate, positive. "Real interest rates need to move in the direction of encouraging bank deposits", the central bank said. While a private local banker here said, “Rate of interest may have to go up. Banks have to take a view at the end of the quarter.”
The RBI estimates the growth in Q1 of 2010-11 at 8.8 per cent. “Although some of this is attributable to a favourable base effect, the growth rate indicates that the recovery is consolidating and the economy is rapidly converging to its trend rate of growth,” RBI said.
According to the central bank the index of industrial production (IIP) showed some slippage in the last month of the quarter (June 2010) with the revised numbers showing growth to be a relatively sluggish 5.8 per cent. The trend was sharply reversed in July, with growth surging to 13.8 per cent, led by capital goods, which grew by 63 per cent. Although the year-on-year growth rate for the first four months of the year remains robust at 11.4 per cent, the high volatility over the past two months raises some doubts about how effectively the index reflects the underlying momentum in the industrial sector.
The growth prospects in agriculture according to the RBI have clearly been boosted by the monsoon, which, by virtue of substantial replenishment of reservoirs and ground water, will also contribute to a good rabi harvest. Virtually all leading indicators of service sector activity point to sustained growth.
However, the inflation remains the dominant concern in macroeconomic management. The published wholesale price index (WPI) inflation rate for August 2010 was based on the new series (base year: 2004-05=100) for the first time. The new series has better coverage of items and the manufacturing products group has a slightly higher weight. Both the old and the new series, however, indicate similar broad trend of inflation. For instance, average monthly WPI inflation for Q1 of 2010-11, based on either series, is in double digits.
However, the monthly average of WPI inflation for Q1 of 2010-11 under the new series at 10.6 per cent was about 50 basis points lower than the rate of 11.1 per cent under the old series. In July 2010, there was a slight moderation in the provisional WPI inflation under both the series. There has been further moderation in the provisional WPI inflation to 8.5 per cent in August from 9.8 per cent in July 2010 as per the new series. The direction of the inflation rate movement is consistent with the Reserve Bank’s projection made in the July review, though the magnitude could be slightly different. “There is, therefore, need for continued policy response to contain inflation and anchor inflationary expectation,” RBI said.
With reference to government finances, the fiscal deficit appears to be conforming to the estimates made in the Union Budget for 2010-11. “Higher than expected realisations on 3G and broadband wireless access (BWA) auctions combined with buoyant tax revenues have virtually eliminated the risk of the fiscal deficit overshooting the targeted 5.5 per cent, even after the supplementary demand for grants is taken into account. This will help stabilise market expectations of liquidity and interest rate movements,” the central bank said.
The Reserve Bank of India (RBI), central bank, on Thursday took a step of hiking the key short-term lending rate which is expected to contain the rising inflation. Bankers here believe that the move is expected to raise the deposit rates.
The repo rate, the rate at which our banks borrow rupees from the central bank, is raised by 25 basis points (bps) to 6 per cent and reverse repo rate, rate at which RBI borrows money from the banks, has been hiked by 50 bps to 5 per cent with immediate effect.
The decision has been guided by the need to contain inflation, which is currently at 8.5 per cent (food inflation has touched 15.10 per cent), as a hike in rates will lead to a rise in cost of funds for banks and will make loans expensive. This, in turn, will reduce consumption.
While another banker said, "Till September 30 most of the banks would hold on to the interest rate. After that there might be a pass on effect to customer."
The RBI wants deposit rates to go up as there is a need to make the real interest rates, the difference between inflation and deposit rate, positive. "Real interest rates need to move in the direction of encouraging bank deposits", the central bank said. While a private local banker here said, “Rate of interest may have to go up. Banks have to take a view at the end of the quarter.”
The RBI estimates the growth in Q1 of 2010-11 at 8.8 per cent. “Although some of this is attributable to a favourable base effect, the growth rate indicates that the recovery is consolidating and the economy is rapidly converging to its trend rate of growth,” RBI said.
According to the central bank the index of industrial production (IIP) showed some slippage in the last month of the quarter (June 2010) with the revised numbers showing growth to be a relatively sluggish 5.8 per cent. The trend was sharply reversed in July, with growth surging to 13.8 per cent, led by capital goods, which grew by 63 per cent. Although the year-on-year growth rate for the first four months of the year remains robust at 11.4 per cent, the high volatility over the past two months raises some doubts about how effectively the index reflects the underlying momentum in the industrial sector.
The growth prospects in agriculture according to the RBI have clearly been boosted by the monsoon, which, by virtue of substantial replenishment of reservoirs and ground water, will also contribute to a good rabi harvest. Virtually all leading indicators of service sector activity point to sustained growth.
However, the inflation remains the dominant concern in macroeconomic management. The published wholesale price index (WPI) inflation rate for August 2010 was based on the new series (base year: 2004-05=100) for the first time. The new series has better coverage of items and the manufacturing products group has a slightly higher weight. Both the old and the new series, however, indicate similar broad trend of inflation. For instance, average monthly WPI inflation for Q1 of 2010-11, based on either series, is in double digits.
However, the monthly average of WPI inflation for Q1 of 2010-11 under the new series at 10.6 per cent was about 50 basis points lower than the rate of 11.1 per cent under the old series. In July 2010, there was a slight moderation in the provisional WPI inflation under both the series. There has been further moderation in the provisional WPI inflation to 8.5 per cent in August from 9.8 per cent in July 2010 as per the new series. The direction of the inflation rate movement is consistent with the Reserve Bank’s projection made in the July review, though the magnitude could be slightly different. “There is, therefore, need for continued policy response to contain inflation and anchor inflationary expectation,” RBI said.
With reference to government finances, the fiscal deficit appears to be conforming to the estimates made in the Union Budget for 2010-11. “Higher than expected realisations on 3G and broadband wireless access (BWA) auctions combined with buoyant tax revenues have virtually eliminated the risk of the fiscal deficit overshooting the targeted 5.5 per cent, even after the supplementary demand for grants is taken into account. This will help stabilise market expectations of liquidity and interest rate movements,” the central bank said.
Rs 14 cr withdrawn from ATMs in Kashmir
Buzz back in Valley bazaars
BILAL HUSSAIN
After nine days curfew in the Valley, markets on Sunday returned back to life with people in large numbers flocking shops and ATMs. According to a banker over Rs 14 crore were withdrawn from JK Bank ATMs in the valley.
The branch offices of various banks operating in the Valley today were closed. However, nine branches of JK Bank— only listed company in the state— remained open despite being Sunday witnessed huge rush. Throughout the day while the JKB bankers were busy in disbursing the cash, the customers in large numbers could also be seen withdrawing amounts at the ATMs spread across the Valley.
Vice President Corporate Communication JK Bank, Khurshid A Pandit told Kashmir Times that at 6:30 pm on Sunday over Rs 14.5 crore were disbursed through 155 ATMs of JK Bank installed in the Valley through 44,000 transactions.
Most of the customers throughout the day were seen in long queues waiting for their turn at different ATMs in Srinagar. "I am waiting for about 15 minutes for my turn and I think it is going to take some more minutes," said Arshad Ahmad at an ATM at MS Mall, here.
People made huge purchase particularly food item. Most of the shopkeepers in the city told Kashmir Times that the rush for the entire day was overwhelming. "We remained busy for the entire day as there was huge rush of customers," said Musataq Ahmad, a shopkeeper in Nowhatta in the Shahr-e-Khaas here. Due to the strike against the killing of youths in Kashmir by CRPF followed by nine-day curfew in the Valley imposed by the government to prevent public rallies, the markets in the Valley remained off for more than a week.
Huge rush could also be seen at the shops of vegetable vendors, bakers, and meat shops across the Valley. "It took me half an hour to get a kilogram of mutton from a local meat shop," said Audil Hussain of Qamarwari.
"The rush was expected as people could not purchase anything, and even the essential commodities, during the curfew period," said Abdul Majeed, a shopkeeper in Safakadal.
Many people could be seen purchasing daily-use items including food articles in large quantities fearing that situation may again take an untoward turn, which could lead to further strikes or curfew. "I bought rice which could suffice for three months to my family," said a customer. However, the high-end products and services found few takers today. Jewelry, readymade garments, shoes, and other non-essential items were almost negligible.
Almost all the segments of business witnessed huge rush here. "Many constructions works had come to a halt for want of necessary material. But today those works were resumed and people purchased the goods," said Javaid Ahmad, a shopkeeper in Bemina. Javaid who sells sanitary fitting items said: "I made good sales during the day."
BILAL HUSSAIN
After nine days curfew in the Valley, markets on Sunday returned back to life with people in large numbers flocking shops and ATMs. According to a banker over Rs 14 crore were withdrawn from JK Bank ATMs in the valley.
The branch offices of various banks operating in the Valley today were closed. However, nine branches of JK Bank— only listed company in the state— remained open despite being Sunday witnessed huge rush. Throughout the day while the JKB bankers were busy in disbursing the cash, the customers in large numbers could also be seen withdrawing amounts at the ATMs spread across the Valley.
Vice President Corporate Communication JK Bank, Khurshid A Pandit told Kashmir Times that at 6:30 pm on Sunday over Rs 14.5 crore were disbursed through 155 ATMs of JK Bank installed in the Valley through 44,000 transactions.
Most of the customers throughout the day were seen in long queues waiting for their turn at different ATMs in Srinagar. "I am waiting for about 15 minutes for my turn and I think it is going to take some more minutes," said Arshad Ahmad at an ATM at MS Mall, here.
People made huge purchase particularly food item. Most of the shopkeepers in the city told Kashmir Times that the rush for the entire day was overwhelming. "We remained busy for the entire day as there was huge rush of customers," said Musataq Ahmad, a shopkeeper in Nowhatta in the Shahr-e-Khaas here. Due to the strike against the killing of youths in Kashmir by CRPF followed by nine-day curfew in the Valley imposed by the government to prevent public rallies, the markets in the Valley remained off for more than a week.
Huge rush could also be seen at the shops of vegetable vendors, bakers, and meat shops across the Valley. "It took me half an hour to get a kilogram of mutton from a local meat shop," said Audil Hussain of Qamarwari.
"The rush was expected as people could not purchase anything, and even the essential commodities, during the curfew period," said Abdul Majeed, a shopkeeper in Safakadal.
Many people could be seen purchasing daily-use items including food articles in large quantities fearing that situation may again take an untoward turn, which could lead to further strikes or curfew. "I bought rice which could suffice for three months to my family," said a customer. However, the high-end products and services found few takers today. Jewelry, readymade garments, shoes, and other non-essential items were almost negligible.
Almost all the segments of business witnessed huge rush here. "Many constructions works had come to a halt for want of necessary material. But today those works were resumed and people purchased the goods," said Javaid Ahmad, a shopkeeper in Bemina. Javaid who sells sanitary fitting items said: "I made good sales during the day."
LEAD BANK SCHEME
Absence of LDO discredits RBI in JK
BILAL HUSSAIN
In rest of the India the Reserve Bank of India [RBI] — the central banking system of India which controls the monetary policy of the rupee as well as USD currency reserves— has Lead District Officer in all districts while none is deputed in any of 22 district of Jammu and Kashmir.
According to a RBI report of the ‘High Level Committee to on the Lead Bank Scheme’ The service areas are to be allocated to the branches by a committee headed by the Lead District Officer [LDO] of the Reserve Bank of India with Lead Bank Officer of the district and the concerned officer from NABARD as members. “Unfortunately it is not the case with the state. There is a Regional Director, RBI J&K stationed at Jammu and Deputy General Manager in Charge in Srinagar. While no LDO is deputed in any district of the state,” said an economic expert.
The role of LDO of the RBI is to act as a catalytic agent for developmental activities in the district. “To clarify position with respect to various policy guidelines issued by RBI, conduct periodic branch visits and participate in various meetings connected with Lead Bank Scheme (LBS). Bring to the notice of the regulator policy issues at the field level that require examination at the apex level which may have wider ramifications. To associate with the planning process at the district level and facilitate financial inclusion and financial literacy activities in the district,” scheme mentions.
The LDO of Reserve Bank is also a member of the District Consultative Committee (DCC). The Reserve Bank LDO should attend these public meetings and give a feedback to the respective Regional Office of the Reserve Bank as also to the Banking ombudsman in the state on the grievances raised during such meetings and the manner of their resolution.
According to the scheme the Lead District Officer of RBI and the officer concerned from NABARD have to attend the meetings of the Block Level Bankers’ Committees (BLBCs). In case of J&K the meeting does take place in-absence of LDO.
The preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as “...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”
The RBI does stick to its mandate in rest of the India but when it comes to J&K it limits its role, laments an economist.
Despite several attempts to reach the Regional Director of Reserve Bank of India for Jammu and Kashmir, Arnab Roy could not be contacted for his comments.
BILAL HUSSAIN
In rest of the India the Reserve Bank of India [RBI] — the central banking system of India which controls the monetary policy of the rupee as well as USD currency reserves— has Lead District Officer in all districts while none is deputed in any of 22 district of Jammu and Kashmir.
According to a RBI report of the ‘High Level Committee to on the Lead Bank Scheme’ The service areas are to be allocated to the branches by a committee headed by the Lead District Officer [LDO] of the Reserve Bank of India with Lead Bank Officer of the district and the concerned officer from NABARD as members. “Unfortunately it is not the case with the state. There is a Regional Director, RBI J&K stationed at Jammu and Deputy General Manager in Charge in Srinagar. While no LDO is deputed in any district of the state,” said an economic expert.
The role of LDO of the RBI is to act as a catalytic agent for developmental activities in the district. “To clarify position with respect to various policy guidelines issued by RBI, conduct periodic branch visits and participate in various meetings connected with Lead Bank Scheme (LBS). Bring to the notice of the regulator policy issues at the field level that require examination at the apex level which may have wider ramifications. To associate with the planning process at the district level and facilitate financial inclusion and financial literacy activities in the district,” scheme mentions.
The LDO of Reserve Bank is also a member of the District Consultative Committee (DCC). The Reserve Bank LDO should attend these public meetings and give a feedback to the respective Regional Office of the Reserve Bank as also to the Banking ombudsman in the state on the grievances raised during such meetings and the manner of their resolution.
According to the scheme the Lead District Officer of RBI and the officer concerned from NABARD have to attend the meetings of the Block Level Bankers’ Committees (BLBCs). In case of J&K the meeting does take place in-absence of LDO.
The preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as “...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.”
The RBI does stick to its mandate in rest of the India but when it comes to J&K it limits its role, laments an economist.
Despite several attempts to reach the Regional Director of Reserve Bank of India for Jammu and Kashmir, Arnab Roy could not be contacted for his comments.
JKB achieves highest coverage ratio in the industry
BILAL HUSSAIN
The Jammu and Kashmir Bank— only listed company in the state— has achieved the highest Coverage Ratio in Indian banking industry of 83 per cent, Chairman and CEO JKB, Dr Haseeb A Drabu, said in a press conference here on Sunday.
The Bank of Baroda is on the second number having coverage ratio of 78 per cent, followed by the Punjab National Bank with 74 per cent and HDFC bank having 72 per cent.
In a presentation Dr Drabu while comparing the JK Banks performances with the peer banks said that the bank tops the list on a significant parameter of cost to income by achieving 35.70 per cent followed by the ICICI Bank managing 36.20 per cent and Canara Bank finds third rank having 36.92 per cent of cost to income.
Moreover, the Return on Assets for the current year of JKB has improved to 1.20 per cent compared to 1.09 per cent for the previous financial year. Dr Drabu mentions that the bank is on the 4th rank on a critical financial parameter of return on assets (annualized) as on December 2009 is 1.33 per cent, while Axis Bank has achieved 1.60 per cent, Canara Bank has managed 1.47 per cent followed by the Punjab National Bank securing 1.43 per cent for the same period.
The bank also beats the rest on a vital parameter of Net Impaired Loans; JKB has achieved 0.38 per cent for the parameter. While, HDFC Bank and Axis Bank secured second and third position by achieving 0.45 per cent and 0.46 per cent respectively on Net Impaired Loans.
The bank has achieved the highest Tier I Capital in accordance to the Basel II recommendations at 14.54 per cent. Followed by ICICI Bank and HDFC Bank at 14.20 per cent and 13.80 per cent respectively on Tier I Capital.
J&K Bank secures third rank on the Earnings per Share of Rs 80.93. While State Bank of India and Punjab National Bank secures 1st and 2nd rank by achieving Rs 114.97 and Rs 87.86 respectively on the Earnings per Share.
The bank achieves the seconds place in the list by securing Book value of Rs 621.97. The State Bank of India tops the list by achieving Rs 1003.
The Jammu and Kashmir Bank— only listed company in the state— has achieved the highest Coverage Ratio in Indian banking industry of 83 per cent, Chairman and CEO JKB, Dr Haseeb A Drabu, said in a press conference here on Sunday.
The Bank of Baroda is on the second number having coverage ratio of 78 per cent, followed by the Punjab National Bank with 74 per cent and HDFC bank having 72 per cent.
In a presentation Dr Drabu while comparing the JK Banks performances with the peer banks said that the bank tops the list on a significant parameter of cost to income by achieving 35.70 per cent followed by the ICICI Bank managing 36.20 per cent and Canara Bank finds third rank having 36.92 per cent of cost to income.
Moreover, the Return on Assets for the current year of JKB has improved to 1.20 per cent compared to 1.09 per cent for the previous financial year. Dr Drabu mentions that the bank is on the 4th rank on a critical financial parameter of return on assets (annualized) as on December 2009 is 1.33 per cent, while Axis Bank has achieved 1.60 per cent, Canara Bank has managed 1.47 per cent followed by the Punjab National Bank securing 1.43 per cent for the same period.
The bank also beats the rest on a vital parameter of Net Impaired Loans; JKB has achieved 0.38 per cent for the parameter. While, HDFC Bank and Axis Bank secured second and third position by achieving 0.45 per cent and 0.46 per cent respectively on Net Impaired Loans.
The bank has achieved the highest Tier I Capital in accordance to the Basel II recommendations at 14.54 per cent. Followed by ICICI Bank and HDFC Bank at 14.20 per cent and 13.80 per cent respectively on Tier I Capital.
J&K Bank secures third rank on the Earnings per Share of Rs 80.93. While State Bank of India and Punjab National Bank secures 1st and 2nd rank by achieving Rs 114.97 and Rs 87.86 respectively on the Earnings per Share.
The bank achieves the seconds place in the list by securing Book value of Rs 621.97. The State Bank of India tops the list by achieving Rs 1003.
Target 2012: Rs 1 lakh cr business, Rs1000 cr profits
JKB posts Rs 512.38 cr net profit, up 25 per cent
BILAL HUSSAIN
The Jammu and Kashmir Bank— solo listed company in the state— on Sunday declared the annual results, which has crossed Rs 500 crore mark in its annual net profits. The registered highest ever profit of Rs 512.38 crore for the financial year 2010, which is up by 25 per cent from Rs 409.84 crore recorded during the corresponding year.
The net profit for the quarter ended March, 2010 increased by 53 per cent and stood at Rs 120.04 crore compared to Rs 78.68 crore earned during the corresponding quarter, 2009.
The Bank announced this during the review of financial results for the quarter and financial year ended March, 2010, by the bank’s Board of Directors in a meeting held here on Sunday.
Dr Haseeb A Drabu Chairman and CEO J&K Bank today gave a detailed presentation of the Bank’s performance for the last five years during ‘Meet the Press’ event held at SKICC, Srinagar.
Terming the achievement of the last five years as a process of ‘quiet transformation’, Dr Drabu said, “After the consolidation phase of last five years, today we are among the most stable and efficient banks in the country in terms of basics, business and returns. Now our focus would be on growth”.
He said, “The total business turnover of the bank has increased by 12 per cent YoY and moved up from Rs 53935 crore to Rs 60294 crore. In the next two years, we have given ourselves the target of achieving the total business of Rs 1 Lac crore besides 1 thousand crore profit”.
Elaborating upon the various steps that bank took in the last five years, Dr Drabu said, “For the last 5 years, our approach was mainly inward looking. We focused on consolidation by changing the composition of advances like we increased our credit deployment in J&K exponentially from 1200 crore to 12000 crores. We managed our liabilities well and restructured our lending in ROI”, he added.
The Operating Profit for the year ended Mar, 2010 has increased by 24 per cent YoY to Rs 958 crore from Rs 774 crore earned during the previous financial year. Operating Income (Net Interest Income plus Other Income) for the current year was Rs 1536 crore as against Rs 1245 crore for the last fiscal registering an increase of 23 per cent.
These profits are driven by the substantial improvement in the bank’s Fee Based Income (Other Income) during the current Financial Year, which is up by 70 per cent from Rs 245 crore to Rs 416 crore, the major contributor being Treasury / Trading Income.
The Loan Book as on March 31, 2010 stood at Rs 23057 crore up by 10 per cent from last year’s Rs 20930 crore. The Bank’s Deposit base at the same date stood at Rs 37237 crore up 13 per cent from Rs 33004 crore as on March 31, 2009.
The Return on Assets for the current year improved to 1.20 per cent compared to 1.09 per cent for the previous financial year. With the leveraging of technology and managing costs efficiently, the Bank continues to bring down its Cost to Income ratio which is at 37.60 per cent for the year ended Mar, 2010 compared to 37.81 per cent a year ago.
The Gross NPAs as on Mar, 2010 have declined considerably to Rs 462.31 crore from Rs 559.27 crore a year ago. The NPA Coverage Ratio as on Mar, 2010 is at 86 per cent up from 49 per cent a year ago and well above the RBI stipulated norm of 70 per cent.
The investments of the bank as on Mar 31, 2010 grew by 30 per cent YoY to Rs 13956 crore.
Of the total investments 68.7 per cent are in the HTM category, 31.2 per cent in the AFS category and rest in the HFT category. The SLR securities form 61 per cent of the total Investments. Net Worth of the Bank as on March, 2010 stood at Rs 3010 crore compared to Rs 2623 crore a year earlier, registering a growth of 15 per cent.
The low cost Demand and Savings Deposits of the Bank as on Mar, 2010 are at Rs 15153 crore up by 20 per cent YoY from Rs 12579 crore as on Mar, 2009 taking the CASA ratio up to 40.69 per cent from 38.11 per cent a year ago.
In a question, under Banks vision, the J&K Bank has targeted its business up to 2012 to Rs one lakh cores and the profit worth Rs 1,000 crores.
He further said that newly created Common Service Centers known as Khidmat Centers shall be utilized to provide basic banking facilities to the people.
Drabu further said that from the last last two –three years, the bank has touched to newer heights and said the Bank has introduced Insurance, healthcare, financial patronage to the under privileged members of the society as also loans for almost all commercial, agrticultural, educational and personal needs.
Darbu said that there is no any hurdle to get loan from bank, however, one has to fulfill all the obligations required for and has to complete all the paperwork. He further said that in fact the J&K Bank has reduced many hurdles and there is no question that the people are not getting loans from the Bank easily.
BILAL HUSSAIN
The Jammu and Kashmir Bank— solo listed company in the state— on Sunday declared the annual results, which has crossed Rs 500 crore mark in its annual net profits. The registered highest ever profit of Rs 512.38 crore for the financial year 2010, which is up by 25 per cent from Rs 409.84 crore recorded during the corresponding year.
The net profit for the quarter ended March, 2010 increased by 53 per cent and stood at Rs 120.04 crore compared to Rs 78.68 crore earned during the corresponding quarter, 2009.
The Bank announced this during the review of financial results for the quarter and financial year ended March, 2010, by the bank’s Board of Directors in a meeting held here on Sunday.
Dr Haseeb A Drabu Chairman and CEO J&K Bank today gave a detailed presentation of the Bank’s performance for the last five years during ‘Meet the Press’ event held at SKICC, Srinagar.
Terming the achievement of the last five years as a process of ‘quiet transformation’, Dr Drabu said, “After the consolidation phase of last five years, today we are among the most stable and efficient banks in the country in terms of basics, business and returns. Now our focus would be on growth”.
He said, “The total business turnover of the bank has increased by 12 per cent YoY and moved up from Rs 53935 crore to Rs 60294 crore. In the next two years, we have given ourselves the target of achieving the total business of Rs 1 Lac crore besides 1 thousand crore profit”.
Elaborating upon the various steps that bank took in the last five years, Dr Drabu said, “For the last 5 years, our approach was mainly inward looking. We focused on consolidation by changing the composition of advances like we increased our credit deployment in J&K exponentially from 1200 crore to 12000 crores. We managed our liabilities well and restructured our lending in ROI”, he added.
The Operating Profit for the year ended Mar, 2010 has increased by 24 per cent YoY to Rs 958 crore from Rs 774 crore earned during the previous financial year. Operating Income (Net Interest Income plus Other Income) for the current year was Rs 1536 crore as against Rs 1245 crore for the last fiscal registering an increase of 23 per cent.
These profits are driven by the substantial improvement in the bank’s Fee Based Income (Other Income) during the current Financial Year, which is up by 70 per cent from Rs 245 crore to Rs 416 crore, the major contributor being Treasury / Trading Income.
The Loan Book as on March 31, 2010 stood at Rs 23057 crore up by 10 per cent from last year’s Rs 20930 crore. The Bank’s Deposit base at the same date stood at Rs 37237 crore up 13 per cent from Rs 33004 crore as on March 31, 2009.
The Return on Assets for the current year improved to 1.20 per cent compared to 1.09 per cent for the previous financial year. With the leveraging of technology and managing costs efficiently, the Bank continues to bring down its Cost to Income ratio which is at 37.60 per cent for the year ended Mar, 2010 compared to 37.81 per cent a year ago.
The Gross NPAs as on Mar, 2010 have declined considerably to Rs 462.31 crore from Rs 559.27 crore a year ago. The NPA Coverage Ratio as on Mar, 2010 is at 86 per cent up from 49 per cent a year ago and well above the RBI stipulated norm of 70 per cent.
The investments of the bank as on Mar 31, 2010 grew by 30 per cent YoY to Rs 13956 crore.
Of the total investments 68.7 per cent are in the HTM category, 31.2 per cent in the AFS category and rest in the HFT category. The SLR securities form 61 per cent of the total Investments. Net Worth of the Bank as on March, 2010 stood at Rs 3010 crore compared to Rs 2623 crore a year earlier, registering a growth of 15 per cent.
The low cost Demand and Savings Deposits of the Bank as on Mar, 2010 are at Rs 15153 crore up by 20 per cent YoY from Rs 12579 crore as on Mar, 2009 taking the CASA ratio up to 40.69 per cent from 38.11 per cent a year ago.
In a question, under Banks vision, the J&K Bank has targeted its business up to 2012 to Rs one lakh cores and the profit worth Rs 1,000 crores.
He further said that newly created Common Service Centers known as Khidmat Centers shall be utilized to provide basic banking facilities to the people.
Drabu further said that from the last last two –three years, the bank has touched to newer heights and said the Bank has introduced Insurance, healthcare, financial patronage to the under privileged members of the society as also loans for almost all commercial, agrticultural, educational and personal needs.
Darbu said that there is no any hurdle to get loan from bank, however, one has to fulfill all the obligations required for and has to complete all the paperwork. He further said that in fact the J&K Bank has reduced many hurdles and there is no question that the people are not getting loans from the Bank easily.
RBI raises CRR by 75 bsp, projects growth to 7.5 pc
Valley bankers expect lending rate hike
BILAL HUSSAIN
SRINAGAR: The Reserve Bank, central bank of India, on Friday left key interest rates unchanged. The bank in its policy stance increased the cash reserve ratio (CRR) of scheduled banks by 75 basis points from 5.0 per cent to 5.75 per cent. The valley bankers and experts here believe it is inline with their expectation.
The cash reserve ratio — the amount of bank deposits and borrowings that banks must keep with the RBI— of their net demand and time liabilities (NDTL) would be increased in two stages, in the first stage 50 basis points increase would be effective form the fortnight beginning February 13, 2010, followed by the next stage of increase of 25 basis points effective from the fortnight beginning February 27, 2010. The increase of CRR would result in about Rs 36,000 crore absorption of liquidity from the system.
Chairman Ellaquai Dehati Bank, A U Tak told Kashmir Times that the CRR hike by the Reserve Bank of India (RBI) is not at all a surprise. “It is on expected lines.”
According to Tak there would not be much impact of CRR hike in the Valley. He substantiates his argument by saying the CD (credit deposit) ratio in the whole valley is low, ‘so less or little impact in the valley’.
The profitability of the banks is going to get hit by the CRR hike as it would shrink the margins. “Banks do not earn any interest on the CRR and given the state of credit off-take, it will be very difficult for banks to pass on these costs to clients. So, most of the heat from this tightening will be taken by banks.” However, Tak believes that in immediate future the rise in advance rates could be expected.
Experts here believe that the CRR hike would slow the credit off-take as the banks are expected to raise the lending rates. “This would affect the growth rate in the state,” said an expert.
The RBI said that the Indian economy showed a degree of resilience as it recorded a better-than-expected growth of 7.9 per cent during the second quarter of 2009-10. Subsequent data releases confirm the assessment that the economy is steadily gaining momentum, though public expenditure continues to play a dominant role, and performance across sectors is uneven, suggesting that recovery is yet to become sufficiently broad-based.
In the Second Quarter Review of October 2009, we projected GDP growth for 2009-10 of 6 per cent with an upside bias. Recent movements in the indicators of real sector activity suggest that the upside bias has materialised. Assuming a near zero growth in agricultural production and continued recovery in industrial production and services sector activity, the baseline projection for GDP growth for 2009-10 is now raised to 7.5 per cent.
For several months, rapidly rising food inflation has been a cause for concern. There are indications that the sustained increase in food prices is beginning to spill over into other commodities and services as well. The October 2009 Review projected WPI inflation for end-March 2010 of 6.5 per cent with an upside bias. The upside risk in terms of higher food prices reflecting the poor south-west monsoon has already materialised. Some additional factors such as higher global crude prices and less than expected seasonal moderation in food prices have also exerted upward pressure on inflation. Based on the latest evidence, the baseline projection for WPI inflation for end-March 2010 is now raised to 8.5 per cent, RBI said.
The RBI expect three major outcomes from the policy one reduction in excess liquidity will help anchor inflationary expectations. Second, the recovery process will be supported without compromising price stability. And the thirds, the calibrated exit will align policy instruments with the current and evolving state of the economy.
BILAL HUSSAIN
SRINAGAR: The Reserve Bank, central bank of India, on Friday left key interest rates unchanged. The bank in its policy stance increased the cash reserve ratio (CRR) of scheduled banks by 75 basis points from 5.0 per cent to 5.75 per cent. The valley bankers and experts here believe it is inline with their expectation.
The cash reserve ratio — the amount of bank deposits and borrowings that banks must keep with the RBI— of their net demand and time liabilities (NDTL) would be increased in two stages, in the first stage 50 basis points increase would be effective form the fortnight beginning February 13, 2010, followed by the next stage of increase of 25 basis points effective from the fortnight beginning February 27, 2010. The increase of CRR would result in about Rs 36,000 crore absorption of liquidity from the system.
Chairman Ellaquai Dehati Bank, A U Tak told Kashmir Times that the CRR hike by the Reserve Bank of India (RBI) is not at all a surprise. “It is on expected lines.”
According to Tak there would not be much impact of CRR hike in the Valley. He substantiates his argument by saying the CD (credit deposit) ratio in the whole valley is low, ‘so less or little impact in the valley’.
The profitability of the banks is going to get hit by the CRR hike as it would shrink the margins. “Banks do not earn any interest on the CRR and given the state of credit off-take, it will be very difficult for banks to pass on these costs to clients. So, most of the heat from this tightening will be taken by banks.” However, Tak believes that in immediate future the rise in advance rates could be expected.
Experts here believe that the CRR hike would slow the credit off-take as the banks are expected to raise the lending rates. “This would affect the growth rate in the state,” said an expert.
The RBI said that the Indian economy showed a degree of resilience as it recorded a better-than-expected growth of 7.9 per cent during the second quarter of 2009-10. Subsequent data releases confirm the assessment that the economy is steadily gaining momentum, though public expenditure continues to play a dominant role, and performance across sectors is uneven, suggesting that recovery is yet to become sufficiently broad-based.
In the Second Quarter Review of October 2009, we projected GDP growth for 2009-10 of 6 per cent with an upside bias. Recent movements in the indicators of real sector activity suggest that the upside bias has materialised. Assuming a near zero growth in agricultural production and continued recovery in industrial production and services sector activity, the baseline projection for GDP growth for 2009-10 is now raised to 7.5 per cent.
For several months, rapidly rising food inflation has been a cause for concern. There are indications that the sustained increase in food prices is beginning to spill over into other commodities and services as well. The October 2009 Review projected WPI inflation for end-March 2010 of 6.5 per cent with an upside bias. The upside risk in terms of higher food prices reflecting the poor south-west monsoon has already materialised. Some additional factors such as higher global crude prices and less than expected seasonal moderation in food prices have also exerted upward pressure on inflation. Based on the latest evidence, the baseline projection for WPI inflation for end-March 2010 is now raised to 8.5 per cent, RBI said.
The RBI expect three major outcomes from the policy one reduction in excess liquidity will help anchor inflationary expectations. Second, the recovery process will be supported without compromising price stability. And the thirds, the calibrated exit will align policy instruments with the current and evolving state of the economy.
HDFC Bank to offer joint certification
Ties up with JU, KU to impart training in banking
BILAL HUSAIN
SRINAGAR: HDFC Bank, one of India’s premier banks, has tied up with the Business School, University of Kashmir and Jammu University (JU) to initiate a joint certification program to train and equip its students with skills essential for the banking sector.
The initiative will create a ready talent pool to cater to the requirements of banking and financial institutions. In return, students will garner specialised skills to meet the expectations of potential employers and familiarise themselves with the operations of banking and financial institutions.
Through this initiative, HDFC Bank has already tied up with 44 B-Schools across India training 1400 students for various modules across the Banking and Finance verticals, such as Relationship Management, Retail Credit & Risk, Retail Banking and SME Banking.
This voluntary joint certification program comprises of training sessions conducted over a period of 45 days where the students will have the opportunity to interact with professional trainers and senior management from HDFC Bank who will help them to acquire comprehensive knowledge about the industry. The students will also receive a certificate after successful completion of the course.
Deputy vice president and state head (J&K) HDFC Bank, Zubair Iqbal said, “Now when we are on the growth path in the state and have already taken our network to 10 branches in a short span of time, we feel it our responsibility to extend our support in corporate social responsibility (CSR) programs in areas like education, health, livelihood creation, skill development, and empowerment of the weaker sections of the society.” Today’s initiative is a step towards this direction. The bank would launch similar programs in future also, he added.
Director the business school University of Kashmir (KU), Prof. Musadiq A Sahaf said, “This is the historical movement for us as it is our first tie up with any corporate although we have some academic collaboration. We complement HDFC Bank for making big strides in Kashmir and emerging as one of the top employers for our alumni. The initiative will help our students to gain first hand experience about working in the banks and present day demands. This will also sharpen their skills so as to come up to the expectations of the industry.
Director Business School Jammu University, Prof. Neelu Rohmetra said “Such initiatives in longer run are going to be beneficial for students as it would help them in better placements in multi nationals particularly in banking industry.”
Among other present on the occasion was dean faculty, Prof. Ashok Aima, director Kathua campus, Prof. J K Dhotra, dean academic affairs, Prof. DPS Sehgal, dean student placement, Prof. B C Sharma, and controller of examination Prof R D sharma.
Commenting on this initiative, Ishlesh Bhaskar, Regional Head – Human Resources from HDFC Bank said, “There is a huge gap between skills that are available and those that are required by banks and financial institutions. This Program is an effort to bridge that gap. The program will train students and impart skills giving them an added advantage over their peers which we believe will play a pivotal role in securing for them a bright future in banking and financial institutions”.
To mention, as on June 30, 2009, the bank had a network of 1416 branches and 3382 ATMs in 550 cities across India. For the quarter ended June 30, 2009, the Bank reported a net profit of Rs 606.1 crores, an increase of 30.5 pc over the corresponding quarter ended June 30, 2008.The Bank earned total income of Rs 5,136.8 crores, an increase of Rs 921.6 crores over the corresponding quarter ended June 30, 2008. Total deposits were Rs 145,732 crores, up from Rs 130,918 crores as of June 30, 2008.The Bank’s total balance sheet size increased by Rs 17,516.4 crores to touch Rs 186,115.0 crores as of June 30, 2009.
BILAL HUSAIN
SRINAGAR: HDFC Bank, one of India’s premier banks, has tied up with the Business School, University of Kashmir and Jammu University (JU) to initiate a joint certification program to train and equip its students with skills essential for the banking sector.
The initiative will create a ready talent pool to cater to the requirements of banking and financial institutions. In return, students will garner specialised skills to meet the expectations of potential employers and familiarise themselves with the operations of banking and financial institutions.
Through this initiative, HDFC Bank has already tied up with 44 B-Schools across India training 1400 students for various modules across the Banking and Finance verticals, such as Relationship Management, Retail Credit & Risk, Retail Banking and SME Banking.
This voluntary joint certification program comprises of training sessions conducted over a period of 45 days where the students will have the opportunity to interact with professional trainers and senior management from HDFC Bank who will help them to acquire comprehensive knowledge about the industry. The students will also receive a certificate after successful completion of the course.
Deputy vice president and state head (J&K) HDFC Bank, Zubair Iqbal said, “Now when we are on the growth path in the state and have already taken our network to 10 branches in a short span of time, we feel it our responsibility to extend our support in corporate social responsibility (CSR) programs in areas like education, health, livelihood creation, skill development, and empowerment of the weaker sections of the society.” Today’s initiative is a step towards this direction. The bank would launch similar programs in future also, he added.
Director the business school University of Kashmir (KU), Prof. Musadiq A Sahaf said, “This is the historical movement for us as it is our first tie up with any corporate although we have some academic collaboration. We complement HDFC Bank for making big strides in Kashmir and emerging as one of the top employers for our alumni. The initiative will help our students to gain first hand experience about working in the banks and present day demands. This will also sharpen their skills so as to come up to the expectations of the industry.
Director Business School Jammu University, Prof. Neelu Rohmetra said “Such initiatives in longer run are going to be beneficial for students as it would help them in better placements in multi nationals particularly in banking industry.”
Among other present on the occasion was dean faculty, Prof. Ashok Aima, director Kathua campus, Prof. J K Dhotra, dean academic affairs, Prof. DPS Sehgal, dean student placement, Prof. B C Sharma, and controller of examination Prof R D sharma.
Commenting on this initiative, Ishlesh Bhaskar, Regional Head – Human Resources from HDFC Bank said, “There is a huge gap between skills that are available and those that are required by banks and financial institutions. This Program is an effort to bridge that gap. The program will train students and impart skills giving them an added advantage over their peers which we believe will play a pivotal role in securing for them a bright future in banking and financial institutions”.
To mention, as on June 30, 2009, the bank had a network of 1416 branches and 3382 ATMs in 550 cities across India. For the quarter ended June 30, 2009, the Bank reported a net profit of Rs 606.1 crores, an increase of 30.5 pc over the corresponding quarter ended June 30, 2008.The Bank earned total income of Rs 5,136.8 crores, an increase of Rs 921.6 crores over the corresponding quarter ended June 30, 2008. Total deposits were Rs 145,732 crores, up from Rs 130,918 crores as of June 30, 2008.The Bank’s total balance sheet size increased by Rs 17,516.4 crores to touch Rs 186,115.0 crores as of June 30, 2009.
JK Bank raises PLR by 50 bpts
BILAL HUSSAIN
Srinagar: The Jammu and Kashmir Bank has hiked its prime lending rate (PLR) by 50 basis points to 14.5 per cent new rates would be put in effect from August 1, 2008.
After the RBI's (Reserve Bank of India) hikes in repo and CRR, "we had to go for PLR hike," said Chief Executive of the bank, Dr Haseeb A Drabu.
According to him the hike would not affect much to customers having long-term loans with the bank. "Long term loans like housing and auto loans, won't get affected as it is spread over longer durations," he adds.
Dr Drabu told Greater Kashmir on Friday that PLR hike would affect the short term business lending like small and medium enterprises and agri-lending. "The PLR hike has been done to give us the headroom to hike deposit rates," he adds.
The bank at present has portfolio of Rs 11,000 crore in Jammu and Kashmir alone. The short-term lending portfolio of the bank is over Rs 2000 crore, which going to get affected, said Dr Drabu.
Earlier the bank had raised PLR by 1 per cent in June to 14 per cent. In the recent review of the credit policy, the Reserve Bank of India, central bank of the country, increased the repo rate, the rate at which the RBI lends overnight to banks by 50 basis points and CRR (Cash Reserve ratio), proportion of bank's deposits that they have to set aside with the central bank by 25 basis points while leaving the reverse repo rate unchanged, bringing the current repo rate and CRR to 9 per cent.
Earlier the bank has posted an impressive Rs 94.56 crore net profit for the first quarter of the current fiscal marking an increase of 14 per cent over the corresponding period of the previous year. The bank's operating profits have gone up by 38 per cent at Rs 181.50 crore.
The total business turnover increased to Rs 48,579 crore in Q1 FY08-09, an increase of 15 per cent over the corresponding period of the previous year. The loan book as on June 30, 2008 stood at Rs 20075 crore up 15.7 per cent from last year's Rs 17351 crore.
As on June 30, 2008 bank's deposit base has stood at Rs 28504 crore from Rs 24744 crore a year back registering an increase of 15.2 per cent.
"The yield in J&K was better than that from the rest of India," he said adding the yield in the Himalayan state was 14 percent against 9.5 percent for the rest of India.
The JKB has earlier posted a net annual profit of Rs 360 crore in 2007-08, which is 31 per cent up from the profits recorded in 2006-07.
Other banks which have raised its PLR are central bank of India, IDBI Bank, Yes Bank, Bank of Rajasthan, PNB, and Axis bank.
After the RBI's (Reserve Bank of India) hikes in repo and CRR, "we had to go for PLR hike," said Chief Executive of the bank, Dr Haseeb A Drabu.
According to him the hike would not affect much to customers having long-term loans with the bank. "Long term loans like housing and auto loans, won't get affected as it is spread over longer durations," he adds.
Dr Drabu told Greater Kashmir on Friday that PLR hike would affect the short term business lending like small and medium enterprises and agri-lending. "The PLR hike has been done to give us the headroom to hike deposit rates," he adds.
The bank at present has portfolio of Rs 11,000 crore in Jammu and Kashmir alone. The short-term lending portfolio of the bank is over Rs 2000 crore, which going to get affected, said Dr Drabu.
Earlier the bank had raised PLR by 1 per cent in June to 14 per cent. In the recent review of the credit policy, the Reserve Bank of India, central bank of the country, increased the repo rate, the rate at which the RBI lends overnight to banks by 50 basis points and CRR (Cash Reserve ratio), proportion of bank's deposits that they have to set aside with the central bank by 25 basis points while leaving the reverse repo rate unchanged, bringing the current repo rate and CRR to 9 per cent.
Earlier the bank has posted an impressive Rs 94.56 crore net profit for the first quarter of the current fiscal marking an increase of 14 per cent over the corresponding period of the previous year. The bank's operating profits have gone up by 38 per cent at Rs 181.50 crore.
The total business turnover increased to Rs 48,579 crore in Q1 FY08-09, an increase of 15 per cent over the corresponding period of the previous year. The loan book as on June 30, 2008 stood at Rs 20075 crore up 15.7 per cent from last year's Rs 17351 crore.
As on June 30, 2008 bank's deposit base has stood at Rs 28504 crore from Rs 24744 crore a year back registering an increase of 15.2 per cent.
"The yield in J&K was better than that from the rest of India," he said adding the yield in the Himalayan state was 14 percent against 9.5 percent for the rest of India.
The JKB has earlier posted a net annual profit of Rs 360 crore in 2007-08, which is 31 per cent up from the profits recorded in 2006-07.
Other banks which have raised its PLR are central bank of India, IDBI Bank, Yes Bank, Bank of Rajasthan, PNB, and Axis bank.
JK Bank to install 150 ATMs this yr in JK
JK Bank to install 150 ATMs this yr in JK
Bank has secured 50 licenses from RBI: Dr Drabu, Shareholders to get 155 pc dividend
BILAL HUSSAIN
Srinagar, July 19: The J&K Bank will be installing 150 ATMs in the state this year. The bank has secured over 50 licenses from the RBI for setting of new branches in the state.
This was revealed by chairman and CEO, JK Bank, Dr Haseeb A Drabu while speaking at the 70th Annual General body Meeting (AGM) of the Bank at SKICC.
"The new vision of the Bank is to engender and catalyze the economic transformation of Jammu and Kashmir," Dr Drabu said, adding that the Bank has changed its policy by moving from investments to advances.
"The major part of deposits that the bank mobilized were invested in the government securities and corporate bonds. However, now the Bank lends its major part of deposits," Dr Drabu said.
"In 2000, more than half of our deposits were lent to government, be it center or the state government, which has come down to one third now."
In reply to a question by a shareholder about "understaffing" in the bank, Dr Drabu said in the coming days there would no such problem.
Many shareholders raised the queries relating to ATMs like lack of on and off site ATMs in rural areas, non-functioning, etc. Dr Drabu said the ATM installation in a particular area depends on the number of accounts having ATM cards in that area, frequency of transactions, etc. "This year we are going to install 150 ATMs in the state," he adds.
On the issuance of the bonus shares to the existing shareholder, Dr Drabu said that there is no such consideration at present with the board of directors of the bank. He also disclosed that the bank has secured over 50 licenses from the RBI (Reserve bank of India) for setting of new branches in the state.
"We have 75 to 80 per cent of our investments in less than 1 year papers," Dr Drabu said, adding that the bank has earned money without making any losses in the treasury operations, while other banks have suffered huge losses. "We have made money without any losses," he adds.
It was unanimously approved in the meeting to pay 155% dividend to the bank's shareholders for the year 2007-08.
"The credit-deposit ratio of the bank has gone up from 37 per cent in 2000 to 50 percent in 2004 and has peaked at 68 per cent in 2008. The shift from investment to advances has been a major change, officials believe."
"The bank has started lending more within the state. The business of the bank within J&K has been growing annually by about 35 per cent, compared to less than 10 per cent earlier. The credit given by the bank within the state is now 45 per cent of the total credit portfolio of the bank, as compared to less than 35 per cent in year 2005-06."
"The commercial credit outstanding in J&K was Rs 6275 crore in 2008 as compared to Rs 37561 crore in 2006 registering a phenomenal growth of 66 per cent over two years.
"The productive lending in the form of commercial credit to small and medium enterprises, horticulture, retail, trade, mortgage, and personal consumption has increased manifolds. The share of bank's lending to state government has come down from 29 per cent in 2001 to 13 percent in 2008."
"The bank has got deeper penetration in the state by creation of seven zones within the state. This has resulted in a much more intensive focus being given by the bank's business development teams," he said.
The bank has been working out processes, products and procedures, which has help the bank to reach out to people, empower them and enhance their capacity to make their result-oriented choices, believes Dr Drabu.
JK centric strategy and stand on reaching out to people with less means, profitably has been justified. Not a single beneficiary out of all 400 casedes has defaulted in repayment. "The Ganderbal branch is a zero-NPA branch," he adds.
A new-look of the bank's website was also dedicated to the shareholders and public on the occasion. Introduction of an 'investor relations link' on the website was appreciated by the audience. This would help investors and shareholders to have an update on the Bank's performance, policies and procedures, officials said.
Earlier the bank has posted an operating profit of Rs 651.84 crore up by 17 per cent at the end of March 2008 as compared to the financial year 2006-07. Total income of the bank increased by 30.09 per cent at Rs 2679.24 crore. This includes interest income of Rs 2434.23 crore and other income of Rs 245.01 crore.
Provisioning on account of bad and doubtful debts was reduced by 58 pc to Rs 30 crore as against Rs 71.57 crore past fiscal. As a result the provision cover has marginally come down to 58.05 pc (61.43 pc past fiscal). The Bank has ended the financial year with NPA at 1.08 pc compared to 1.13 pc as at end of preceding year.
Among others, the meeting was attended by executive directors of JK Bank, A K Mehta and A M Mir, Secretary to the bank, Parvez Ahmed, Directors on the board of JK Bank, senior officers of the bank, former directors and executives of the bank.
A corporate film depicting as to how the bank had been instrumental in empowering people and changing lives was also screened on the occasion.
Bank has secured 50 licenses from RBI: Dr Drabu, Shareholders to get 155 pc dividend
BILAL HUSSAIN
Srinagar, July 19: The J&K Bank will be installing 150 ATMs in the state this year. The bank has secured over 50 licenses from the RBI for setting of new branches in the state.
This was revealed by chairman and CEO, JK Bank, Dr Haseeb A Drabu while speaking at the 70th Annual General body Meeting (AGM) of the Bank at SKICC.
"The new vision of the Bank is to engender and catalyze the economic transformation of Jammu and Kashmir," Dr Drabu said, adding that the Bank has changed its policy by moving from investments to advances.
"The major part of deposits that the bank mobilized were invested in the government securities and corporate bonds. However, now the Bank lends its major part of deposits," Dr Drabu said.
"In 2000, more than half of our deposits were lent to government, be it center or the state government, which has come down to one third now."
In reply to a question by a shareholder about "understaffing" in the bank, Dr Drabu said in the coming days there would no such problem.
Many shareholders raised the queries relating to ATMs like lack of on and off site ATMs in rural areas, non-functioning, etc. Dr Drabu said the ATM installation in a particular area depends on the number of accounts having ATM cards in that area, frequency of transactions, etc. "This year we are going to install 150 ATMs in the state," he adds.
On the issuance of the bonus shares to the existing shareholder, Dr Drabu said that there is no such consideration at present with the board of directors of the bank. He also disclosed that the bank has secured over 50 licenses from the RBI (Reserve bank of India) for setting of new branches in the state.
"We have 75 to 80 per cent of our investments in less than 1 year papers," Dr Drabu said, adding that the bank has earned money without making any losses in the treasury operations, while other banks have suffered huge losses. "We have made money without any losses," he adds.
It was unanimously approved in the meeting to pay 155% dividend to the bank's shareholders for the year 2007-08.
"The credit-deposit ratio of the bank has gone up from 37 per cent in 2000 to 50 percent in 2004 and has peaked at 68 per cent in 2008. The shift from investment to advances has been a major change, officials believe."
"The bank has started lending more within the state. The business of the bank within J&K has been growing annually by about 35 per cent, compared to less than 10 per cent earlier. The credit given by the bank within the state is now 45 per cent of the total credit portfolio of the bank, as compared to less than 35 per cent in year 2005-06."
"The commercial credit outstanding in J&K was Rs 6275 crore in 2008 as compared to Rs 37561 crore in 2006 registering a phenomenal growth of 66 per cent over two years.
"The productive lending in the form of commercial credit to small and medium enterprises, horticulture, retail, trade, mortgage, and personal consumption has increased manifolds. The share of bank's lending to state government has come down from 29 per cent in 2001 to 13 percent in 2008."
"The bank has got deeper penetration in the state by creation of seven zones within the state. This has resulted in a much more intensive focus being given by the bank's business development teams," he said.
The bank has been working out processes, products and procedures, which has help the bank to reach out to people, empower them and enhance their capacity to make their result-oriented choices, believes Dr Drabu.
JK centric strategy and stand on reaching out to people with less means, profitably has been justified. Not a single beneficiary out of all 400 casedes has defaulted in repayment. "The Ganderbal branch is a zero-NPA branch," he adds.
A new-look of the bank's website was also dedicated to the shareholders and public on the occasion. Introduction of an 'investor relations link' on the website was appreciated by the audience. This would help investors and shareholders to have an update on the Bank's performance, policies and procedures, officials said.
Earlier the bank has posted an operating profit of Rs 651.84 crore up by 17 per cent at the end of March 2008 as compared to the financial year 2006-07. Total income of the bank increased by 30.09 per cent at Rs 2679.24 crore. This includes interest income of Rs 2434.23 crore and other income of Rs 245.01 crore.
Provisioning on account of bad and doubtful debts was reduced by 58 pc to Rs 30 crore as against Rs 71.57 crore past fiscal. As a result the provision cover has marginally come down to 58.05 pc (61.43 pc past fiscal). The Bank has ended the financial year with NPA at 1.08 pc compared to 1.13 pc as at end of preceding year.
Among others, the meeting was attended by executive directors of JK Bank, A K Mehta and A M Mir, Secretary to the bank, Parvez Ahmed, Directors on the board of JK Bank, senior officers of the bank, former directors and executives of the bank.
A corporate film depicting as to how the bank had been instrumental in empowering people and changing lives was also screened on the occasion.
JK Bank ATMs serve 20,000 customers in Valley daily
JK Bank ATMs serve 20,000 customers in Valley daily
Record 23,000 Transactions, Disburse Rs 5 Cr Everyday
BILAL HUSSAIN
Srinagar, July 15: Any idea about how many customers J&K Bank serves through its extended network of Automated Teller Machines daily? Officials of JK Bank said the Bank ATMs serve over a strong 20,000-customers everyday in Valley alone.
While the ATMs save a lot of time of the customers who find it simple and easy to withdraw money, check balances, etc. the bankers are relieved of a huge rush that otherwise they have to deal with daily.
In charge ATMs JK Bank, Naveed Zargar told Greater Kashmir the Bank ATMs record a whopping 23,000 transactions daily in Kashmir region alone. "The amount disbursed per day is more than Rs 5 crores," Naveed added.
The ATM transactions have increased many manifold in the Valley over past few years. "Most of our customers prefer to have debit/credit cards," he added.
The ATMs enable people to withdraw cash and do a host of other banking activities round the clock by simply pushing the buttons of the machine. All that a person has to do is to simply insert card in the slot, type in his/her PIN number. During the operation the user-friendly ATM screen guides the customer.
According to Naveed during peak business days of each month the ATM transactions gallop to nearly 30,000, and in terms of money the withdrawals amount to over Rs 7.5 crores daily.
The Bank has an overall network of 211 ATMs across India, which includes 92 in Kashmir region. "Apart from withdrawal of money facility, JK Bank ATMs provide services like statement enquires and fund transfer as well."
"The main motive of setting numerous ATMs is to provide 24-hour service to the customers and easy access to cash at their nearest possible location," he said.
During the recent strike, public protests and demonstrations in the Valley over the land transfer to SASB, "the bank provided the ATM services to its customers without any interruptions," said president, corporate affairs and investor relations, JK Bank, Parvez Ahmed.
He said in the areas falling in Civil Lines and around hospitals all the ATMs were functioning and were loaded with enough cash during the strike days in the Valley.
"Our ATMs were working throughout the week and were loaded with sufficient cash. We want to provide quality services to our customers," he said.
Record 23,000 Transactions, Disburse Rs 5 Cr Everyday
BILAL HUSSAIN
Srinagar, July 15: Any idea about how many customers J&K Bank serves through its extended network of Automated Teller Machines daily? Officials of JK Bank said the Bank ATMs serve over a strong 20,000-customers everyday in Valley alone.
While the ATMs save a lot of time of the customers who find it simple and easy to withdraw money, check balances, etc. the bankers are relieved of a huge rush that otherwise they have to deal with daily.
In charge ATMs JK Bank, Naveed Zargar told Greater Kashmir the Bank ATMs record a whopping 23,000 transactions daily in Kashmir region alone. "The amount disbursed per day is more than Rs 5 crores," Naveed added.
The ATM transactions have increased many manifold in the Valley over past few years. "Most of our customers prefer to have debit/credit cards," he added.
The ATMs enable people to withdraw cash and do a host of other banking activities round the clock by simply pushing the buttons of the machine. All that a person has to do is to simply insert card in the slot, type in his/her PIN number. During the operation the user-friendly ATM screen guides the customer.
According to Naveed during peak business days of each month the ATM transactions gallop to nearly 30,000, and in terms of money the withdrawals amount to over Rs 7.5 crores daily.
The Bank has an overall network of 211 ATMs across India, which includes 92 in Kashmir region. "Apart from withdrawal of money facility, JK Bank ATMs provide services like statement enquires and fund transfer as well."
"The main motive of setting numerous ATMs is to provide 24-hour service to the customers and easy access to cash at their nearest possible location," he said.
During the recent strike, public protests and demonstrations in the Valley over the land transfer to SASB, "the bank provided the ATM services to its customers without any interruptions," said president, corporate affairs and investor relations, JK Bank, Parvez Ahmed.
He said in the areas falling in Civil Lines and around hospitals all the ATMs were functioning and were loaded with enough cash during the strike days in the Valley.
"Our ATMs were working throughout the week and were loaded with sufficient cash. We want to provide quality services to our customers," he said.
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