J&K Bank transcends monetary transactions

Education, health, environment and sports continue to be our priority on CSR front. Besides, entrepreneurship development and financial inclusion too are thrust areas . GK Magazine Jammu & Kashmir Bank has won accolades for registering unprecedented growth in its fundamentals. The Bank has added more than Rs.1300 crore per month to its business in 18 months, i.e. from October 2010 to March 2012. The business of the bank during the period witnessed an increase of over Rs 24,000 crore as it jumped from Rs 62,000 crore on September 2010 to over Rs 86,000 crore at the end of March 2012. The net profit of the bank during this period increased from Rs 309 crore (as on September 2010) to over Rs 800 crore (as on March 2012). This means, the bank added almost Rs. 500 crore to its net profit in 18 months. In spite of the difficult conditions for the state economy, the Bank successfully achieved the set targets. The audited financial results as of March 2012 adequately reflect the banks better liability management and operational strength for robust and sustainable growth even in difficult business conditions. Functioning as the premiere developmental institution of the state, the bank continues to play its role as a strong partner for all the viable and sustainable projects which are directed towards the overall development of J&K. The man behind this unprecedented growth story is Mushtaq Ahmad Chairman and CEO the J&K Bank, having 40 years of experience in banking. Mukeet Akmali of Greater Kashmir talked to Mushtaq Ahmad, who first joined J&K Bank as a probationary officer in 1972 and retired in 2008 as Executive Director of the bank. Based on his indepth knowledge of banking and finance industry, he was appointed chairman and Chief Executive Officer of the bank in October 2010. Soon after assuming the charge, he revisited certain business areas of the bank and renewed the strategy for achieving solid growth in the fundamentals of the bank. During the period he has been focusing on exploring the strong business potential in J&K. At the same time, he has successfully reestablished the banks business relations with corporate world in the rest of India. With the new strategies and priorities the growth rate has been substantially accelerated as compared to the past. Summing up, he has been carrying the plan to have the banks credit portfolio spread between J&K and rest of India on 50-50 basis. Excerpts of the interview: Now that you have been holding the prestigious position of Chairman & CEO J&K Bank for more than one and a half years now, how do you think J&K Bank is positioned today? A: J&K Banks uninterrupted growth story and ever-improving balance sheet is a fact that banking analysts and financial experts have been acknowledging for long, Over the past four quarters, which saw most of the banks operating in India struggling to maintain their growth trajectory, J&K Bank stands out. Our consistent performance speaks for itself. The Business of the Bank registered an increase of Rs. 15549 crores during the financial year 2011-12 and reached Rs 86419 crores from Rs. 70870 crores thus recording a growth of 22%. Deposits during the period increased by 19 % to Rs

53342 against Rs. 44670 crores for the previous financial year. The Loans and Advances at Rs 33077 recorded growth of 26% in comparison to Rs 26194 crores as at the end of March-2011. Almost all the key parameters that determine a banking companys soundness are in our favour and their improvement over the years reflects the Banks brand and business positioning. Take us through the key financials during the last fiscal? Over the past four quarters our net interest income has grown roughly at 16 to 24 %, while net profit has grown at 25%. Now see, during the last quarter ending March 31, 2012, our advances and deposits grew at 26% and 19% respectively that is something that beats the industry average of 16%. We also managed to improve our margins (despite others struggling to maintain them) from 3.72 to 3.86. Likewise, our net NPAs fell from 0.2% in the March 2011 quarter to 0.15% as on 31.03.2012, indicating an improvement in asset quality. What in your view is the key for such robust growth? Reasons for this unremitting growth are many but yes, I believe confidence of customers in J&K Bank, especially those hailing from our home state, is the key. Peoples unflinching faith in J&K Bank transcends monetary transactions. They consider it as their own bank, their ambassador and the catalyst of their economic transformation. And, this perception is not based on hearsay or myths, it is a reality that J&K state and its people have seen, observed, understood and comprehended. Besides, it needs to be understood that J&K Bank primarily functions in a state which is to a large extent insulated from the rest of Indias economy. The states traditional and special subeconomies provide an innovative and productive platform for lending which apart from individual empowerment and development of state provides a cushion to J&K Bank to withstand pressures from global or even national slowdown in economy. How do you see the growing competition in banking industry in state especially keeping in view the emergence and increasing footprints of new generation private sector banks here? J&K Bank perceives competition as a positive trend for the states economy. We are taking it in the spirit of further evolution. With a sound business strategy in place and a committed customer base, we are sure to retain our monopoly within the state. Healthy competition and a balanced CD ratio is a combination that can really change fortunes of the state. J&K Bank remains committed to the socio-economic development of the state. What are the major initiatives that you have taken and intend to take on the HR front? I personally feel J&K Banks dedicated human resource is the silent contributor to its growth story. Their commitment and determination to deliver under trying circumstances is something that has inspired me all along. Apart from what J&K Bank does to increase the level of satisfaction of its employees, we have worked out a professional and transparent system to further streamline our HR policy; Career progression through frequent promotions, which are, of course, guided by the parameters of competence and performance, trainings that lead to knowledge development and skill polishing, latest technology enabled techniques to assess performance and much more. What are your expansion plans? We have a plan to increase our branch network by another 100 units by the end of current fiscal. The idea is to further increase our footprint by penetrating deep into the areas which have till now either remained unbanked or under banked. Bank is exploring the opportunities to undertake financial inclusion on a massive scale

with a strategic view to turn it economically viable for the people, state as well as the J&K Bank. What is the strategy in so far as meeting the business and profit targets are concerned? We are following the right path to see that not only we meet but surpass the set target of Rs 1 lac crore for business and Rs.1000 crore for profits. The strategy to continue focus on J&K with trust on key sectors like agriculture, horticulture, tourism, handicrafts and MSMEs. Off late power sector is also gaining our attention. J&K Bank has been doing a lot under its Corporate Social Responsibility. What policy is followed in deciding on the activities and what are the thrust areas? The Corporate Social Responsibility (CSR) of the bank is aligned with the Banks vision statement of peoples empowerment, seeks to recognize obligations towards society and aims at optimizing both business and social performance J&K Bank considers contributions to CSR as an asset rather than expenditure. The approaches adopted in conceiving, handling and implementing CSR initiatives are simple yet professional and at times massive yet methodical. J&K Bank believes in employing innovative and interventionist means to ensure maximization of returns; both social and economical, though from a longterm perspective. Capitalizing on the expertise of the professionals and organizations pursuing various causes of societal concern continue to be our guiding force in the implementation and execution of our CSR initiatives. Education, health, environment and sports continue to be our priority on CSR front. Besides, entrepreneurship development and financial inclusion too are thrust areas. Tell us few things about you financial inclusion & inclusive growth initiatives. For us the mission of Financial Inclusion is of highest priority and through this we attempt to ensure that the benefits of economic prosperity are distributed fairly and reach everyone in the society. However, missions as inclusive growth are not simply economic or social programmes but need a fundamental welfare orientation of care for those strata of the society who are striving and struggling to generate their livelihood. Regarding the Financial Inclusion Plan (FIP) of J&K State for providing of banking services through various ICTbased banking outlets including BCs, our Bank has already covered 646 out of 795 identified un-banked villages with population over 2000. All given targets have been met within the stipulated time, i.e. 31st March, 2012. Today we have no more unbanked blocks in the State as new bank branches have since been opened in all the 5 such blocks identified earlier. Also, J&K Bank has devised an economically inclusive plan wherein by March 2015 the Bank has volunteered to provide banking facilities to 3000 under/unbanked areas across the state. In a society where some people starve for food and are deprived of shelter we need to be very considerate and generously help and support such deserving persons to generate livelihood. We have a plan to increase our branch network by another 100 units by the end of curent fiscal . The idea is to further increase our foot print by penetrating deep into the areas which have till now either remained unbanked or under banked.