After clearing the bottlenecks through proper regulatory compliance, the Bank has embarked on an ambitious expansion plan whereby we would be establishing scores of new Business Units and ATMs particularly within the state. Employment generation, direct by recruitment and indirect through the disbursement of finances to entrepreneurs, will be the thrust area of J&K Bank’s multi-pronged strategy this year.
This was stated here today by J&K Bank Chairman & CEO Mr. Mushtaq Ahmad while interacting with media persons on the event ‘Meet The Press’ at Vivanta (By Taj Resorts).
Promotion of the idea of Self-employment would be at the center of this strategy.  To encourage the idea of self-reliance and entrepreneurship we shall follow through all the cases and will counsel, guide the entrepreneurs all along, he added.
In this regard, the bank sees the Seed Capital Fund Scheme as potential means to promote the new enterprise ethos among the youth of this state, he added.
Dwelling in detail upon the Bank’s achievements and ambitions, the Chairman said, “I feel proud to say that J&K Bank is no. 1 in provision Coverage ratio in the country and our performance is outstanding among old private sector banks”.
Responding to a question on the impact of recent RBI-state Government agreement whereby state government would switch over to Ways & Means Advances (WMA) facility from RBI instead of overdraft availed by from J&K Bank, he said, “There will a positive impact on the functioning of Bank. The arrangement has, in fact, enabled the bank to ensure the regulatory compliance, which will further help us realize our expansion plan. Moreover, the capital parked with government as OD will be deployed into the priority sector within the state”.
Earlier, the Chairman expressed gratitude towards the media fraternity for their valuable and honest support to the efforts of Bank meant for socio-economic development of the Bank.

He said that empowerment of the people through economic well-being has been the mission of J&K Bank. The policies and plans of the Bank are aimed at socio-economic development of the J&K State through active participation in employment generation and poverty alleviation programmes. Consequently, a silent economic transformation is steadily taking place across the state.
The recently announced financial results for FY 2010-11 reflect implementation of business strategy aimed at qualitative and quantitative growth in the business of the Bank. The performance during the FY 11 has put the Bank on a growth trajectory  for achieving the planned target of `1,00,000 crore business and `1000 crores profit by March 2013. Inspite of the challenges faced during the last financial year, the new business strategy has enabled the bank to convert challenges into opportunities.

Major Highlights-FY 2010-11 ended March 31, 2011:

• Net Profit at `615 crore up by 20% compared to `512 crore for the FY ended March 31, 2010.
• Operating profit rose to `1149.49 crore up by 19.96% compared to `958.20 crore a year ago.
• NIMs (Net Interest Margins) expanded to 3.62%, up by 58 bps against 3.04% for the previous FY.
• Yield on Investments improved to 6.34 % up by 63 bps from 5.71%.
• Cost of Deposits declined to 5.05% compared to 5.24% a year ago.
• Low cost Demand & Saving Deposits as on Mar, 2011 at `18087 crore up 19 % from `15153 crore a year ago. CASA Ratio was 40.48% as on Mar, 2011 compared to 40.69% last year.
• Post tax Return on Assets improved to 1.22% from 1.20% for the previous financial year.
• Post Tax Return on Average Net-Worth improved to 18.96% from 18.19 % recorded for the previous financial year.
• Capital Adequacy Ratio Basel I and Basel II as on Mar, 2011 at 13.30% and 13.72% respectively.
• Gross and Net NPA’s as percentages to Gross and Net Advances as on Mar, 2011 at 1.95% and 0.20% respectively compared to 1.97% and 0.28% as on Mar, 2010.
• The Provision Coverage Ratio as on Mar, 2011 at 92.71% (which is much above the RBI stipulated 70%) compared to 90.13 % a year ago.
• A Dividend of 260% recommended by the Board of Directors of the Bank compared to 220% for FY10.

Credit and Deposit Growth FY 11.
The Advances (Net) of the Bank have grown to `26193.64 crore as on Mar, 11 from `23057.23 crore a year ago thereby growing at 14 %. In real terms the loan book has registered growth of around 24% as the Government of Jammu and Kashmir adjusted overdraft facility of `2300 crore in March 2011.  The Deposits grew by 20% to reach at `44676 crore registered growth of 20% in comparison to `37237 crore as on 31.03.2010.
While responding to a question Mushtaq Ahmad said, “The branch network both within and outside J&K is being suitably expanded with a view to strengthening and consolidating our position and reach. During the FY 2010-11 the Bank opened 16 new branches, thereby increasing the network of the branches to 548 in addition to 35 extension counters and 3 mobile branches. The new branches are opened in under banked rural areas of J&K State for providing basic banking facilities to unbanked population and for ensuring presence of the Bank in unrepresented areas outside J&K State. I would like to add here that 94% of the Bank’s branches covering more than 99% of its business are networked under Core Banking Solution (CBS) platform. All CBS branches have been enabled for RTGS & NEFT facilities. Further during the year 73 new ATMs have been commissioned taking the total number of ATMs to 361.”

He said, “To promote and project the idea of self-employment through entrepreneurship in J   & K State is the thrust area of the Bank. In this regard we have taken a lead role in operationalising and implementing the Sheri-I-Kashmir Employment & Welfare Programme for Youth (SKEWPY) promoted by the State Government as a MISSION. As a hand holding measure and to achieve the objective of alternate employment generation the Bank has constituted a task force for monitoring implementation of this scheme as also to counsel and guide the un-employed youth.”

The Bank believes that the concept of self-employment through entrepreneurial initiatives and skill-enhancement as the only viable source to check and counter the menace of unemployment confronting the State of J&K, he added.
 
Goals  for FY 12

• The Bank aims to reach an aggregate business figure of `85000 crore by 31-03-2012, comprising of deposits of `53000 crore and advances of `32000 crore.
• Added thrust on Retail Business, especially retail / CASA deposits and retail advances during FY12.
• Expanding the delivery channels, the Bank plans:
• To increase the number of business units from 548 to 600
• To take the ATM strength from 361 to 600 by March 2012.
• All business units are planned to be rolled over on Core Banking Solution (CBS) platform.

The Bank is currently on a very strong footing to embark upon a high growth trajectory. We are in for aggressive marketing of the competitive price structure of our products and services for achieving the ambitious growth rates that we have set for ourselves. The Bank would continue to focus on further improvement in financing of MSMEs, Trade & Services, Infrastructure projects, Agricultural lending, development of rural masses, reduction in transaction costs, lowering of NPAs through strict monitoring and recovery process, maintaining the NPA coverage ratio at above 90%, increase in CASA deposits and fee based income, would enable us to realize the goal to become a world class, progressive, cost effective and customer friendly institution providing comprehensive financial products and services and serving various segments of the society especially the weaker sections.

The chairman said, “I may inform you that J&K accounts for 0.6% of India’s GDP and yet absorbs only 0.30% of total national credit. J&K accounts for 1% of India’s population and yet accounts for only 0.2% of India’s personal credit. To catch up with national average, credit in J&K has to increase five-fold and personal credit in J&K has to triple. We shall leverage our core competence i.e. dominance and geographical reach in J&K and 1100 Khidmat Centres (Common Services Centres) as Banking Correspondents for achievement of ambitious business targets. We shall endeavour to bridge the credit gap in J&K with focus on potential upcoming and under-serviced sectors.”

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