JK Bank As PSU: A Disaster?

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Asem Mohiuddin                                            PSU

The decision accorded by the State Administrative Council of converting J&K Bank as Public Sector Undertaking followed by bringing it under the ambit of RTI and Central Vigilance Commission has triggered a political chaos in state.

The two major political parties including National Conference (NC) and Peoples Democratic Party (PDP) have been rallying on roads and insisting governor Satya Pal Malik to revoke his decision.

While both the parties and other political figures have not come clear with their position over the decision made by Malik, their protests are also backed by the Bank officials, trader’s fraternity and others.

The decision of governor with regard to the bank is termed as anti state by the protesters and claim that its autonomy has been reduced after converting it into the Public Sector Undertaking (PSU).

“This bank has been converted into a PSU by the governor which is against the interests of state and the bank. We are emotionally attached to it and won’t accept this decision,” said senior PDP leader Khursheed Alam to media after leading the protest rally at Lal Chowk.

While the bank has been competing in the international banking market, Alam said that the maximum political intervention after converting it into PSU will reduce its efficiency.

“Due to maximum intervention by the political workers, bureaucrats, its existence will be under threat.  All those bureaucrats who have been placed in Jammu and Kashmir have waged war against the institutions of state. Be it Article 370, 35 A or the JK Bank they want all to destroy,” he adds and terms the decision as colonized mindset.

“It can’t be accepted. So we urge governor to roll back his decision, they way he did mediclaim insurance scheme recently.”

The RTI movement Jammu and Kashmir, a civil society group who were fighting in high court to bring bank under the ambit of RTI  have apprehensions that it is a  collective effort by the powerful and influential class in state building pressure on SAC to revoke its decision.

“The problem is actually these mainstream political parties have created a confusion and are misleading people. They are not saying clearly what they want to revoke.

They are more concerned about RTI being implemented since they have been grossly involved in making illegal recruitments and favouring people for huge loans,” said Chairman RTI movement Dr Raja Muzaffer Bhat.

Bhat even lashes out on the business fraternity who are also protesting against the decision of Governor.

Bhat who has been demanding the implementation of RTI since 2012 and was first to approach the State Information Commission says that there are many influential businessmen as wilful defaulters after getting huge loans on political intervention. Many of such big fishes may trap after RTI was implemented,” he adds.

Sheikh Ashiq, president Kashmir Chamber and Commerce Industries (KCCI) however, dispels the allegations and says that the trade body is not against any such decision that ensures more efficiency and transparency in the functioning of bank.

“Jammu and Kashmir bank is the only financial institution in India probably that has its 60 per cent shares by state government. And it has been on our side during all the worst times so by virtue of that we are emotionally connected to it and desire to see it progressing,” he said.

“We have no issues with the decision of governor by bringing it under the ambit of RTI and CVC.  But at the same time we have no success stories to share here of any PSU. So we can’t accept any model for our bank that has failed to live upto its expectations,” he told The Legitimate.

Ashiq explains further that there are many PSU’s who have either turned defunct or are under huge financial crisis. On the other hand the JK Bank was performing well in the finance sector. So governor shall respect the sentiments of people and revoke its decision.”

JK Bank needs freedom form political interference

Dipankar Sen Gupta, Economic Professor at Jammu University, however, seconds Ashiq. He claims that the decision is unpopular since Governor should have left it to the elected government.

“There is no second opinion that there are issues with the functioning of JK Bank. Even during the current fiscal they admitted some financial losses. The quality of loans is very bad due to which it incurred huge losses,” he said.

Gupta while discussing the banking situation at national level claims that the public sector banks have the highest Non Performing Assets (NPA’s) compared to private banks. And those who have been granted the loans are influential class and have mostly political backing.

He says when Jammu and Kashmir Bank is converted into PSU, the intervention from the political parties will be more.

“In this context the governor shall have increased its autonomy to get it out of political interferences. The decision is opposite and as an economist I would expect new elected government will revert the decision.”

Gupta, however, is in favour of treating the bank at par with other national banks.

“After converting it into PSU you are technically handing over the bank to the politicians. You can imagine what they will do with it in coming times. I stand for its complete freedom from the political interferences.”

Interestingly, there have been lots of adverse reports against the bank by Reserve Bank of India in past and its functioning has been under questioning.

As many as 2000 illegal recruitments during PDP-BJP regime were made in the bank which had triggered huge crisis in the state.

Many of these political parties are also accused of interfering into the banking affairs and allowing some businessmen and politicians huge loans which later turned the NPA’s.

The chairman of Peoples Conference Sajad Gani Lone took also to micro blogging website twitter and said that decision is retrogative. He said while the world is more focusing on privatization of business, this government drowns JK bank in political control.

“I register my unambiguous rejection of changes being made in the J and K bank. And it needs to bereft of Govt control not drowned in Govt control. This is literally the sole lending institution and lending decisions should be commercial decisions outside the ambit of politics,” he tweeted.

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