28 July, 2021

The Winter Rose

In a strife-torn land, the J&K Bank has a problem—of plenty

The Winter Rose
Let us do a quick word association test. What comes to your mind when someone says "Jammu and Kashmir Bank"? Militancy, bankruptcy, bad news, right? Well, think again. j&k Bank chairman M.Y. Khan wears a perpetual smile on his face. To know why, take a look at the bank's balance sheet and you'll see that he has a problem anyone would envy: having too much money and not knowing what to do with it. Most banks suffer from huge non-performing assets (npas); j&k Bank is expected to close this fiscal with npas of less than 3 per cent (the industry average is 7.3 per cent). Most Indian banks struggle to meet capital adequacy norms; j&k Bank has a capital adequacy ratio of over 18 per cent, double the rbi-mandated 9 per cent. Most Indian banks are striving to reduce cost of funds; j&k Bank raises money dirt-cheap at 6.75 per cent. Its net profit in 2000-01 is expected to touch Rs 160-170 crore, up from Rs 120 crore last year. Last fiscal, deposits were Rs 9,422 crore, but it lent only Rs 3,518 crore. The rest was parked in government securities, rbi bonds and short-term commercial paper....

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