‘J&K Bank’s role inherently vital’

J&K Bank CMD, RK Chhibber talks with The Kashmir Magazine about several issues including the challenges faced by the institution during Covid-19 pandemic, growth of the Bank during his tenure, challenges ahead, future plan and career progression plan ahead. Here are the excerpts:

Kashmir Magazine

Q1: Tell us about your tenure as MD and Chairman of the J&K Bank so far?

Answer: Ever since I took over as Chairman and Managing Director of J&K Bank, the journey has never been a cakewalk. Assuming the responsibility and then shouldering it amidst the most challenging times was indeed a Herculean task.

When I took over, the Bank’s bottom line had weakened -unfavorable business atmosphere owing to political transition of 2019 was immediately followed by COVID 19 pandemic induced lockdowns and restrictions on public movement. This all struck a great blow to the businesses and hardly provided any breather to trade, commerceand industry.

While initial response to pandemic was based more on panic than proper planning, the second wave saw a calibrated response being devised to overcome its fallout on economy. While the first wave saw economy taking a back seat, second wave, though more lethal, was met with an informed response, improved healthcare facilities resulting in better economic management. The Central Government’s timely responsive packages for MSMEs, industrialists, traders and other businesses proved a lifeline for the COVID-19 hit economy.

The well thought-out, targeted and timely intervention from Ministry of the Finance and the Reserve Bank of India helped in re-shaping the Indian Economy especially through a series of business-friendly initiatives that provided a fresh lease of life to the sinking businesses and helped in creating a conducive environment for businesses to build and grow.

Q2. How do you see the growth of the bank in your tenure?

Answer: Neither any organization nor any leader, especially the ones from banking and finance, can boast of having delivered an outstanding performance given the challenging times that the last two years have been. Having said this, I always told myself that challenges never come alone and that they are always accompanied by opportunities but you need to have an eye to spot them. I shared this perception with my colleagues in the top management of the Bank and communicated it down the line right up to our remote operational levels. The results were not only encouraging but inspiring as well.

Keeping alive our spirit to serve our society, we managed to serve our customers well during the toughest days of pandemic. When saving one’s life looked an uncompromising priority, we at J&K bank, especially our staff at the operational levels, held the spirit of serving as supreme. Complying with COVID-19 protocols as directed by the administration from time to time, my colleagues turned into COVID warriors and they not only fought, but won, the quarterly battles for growth and profitability of this Bank.

Q3. How has Covid-19 impacted the performance and growth of the bank?

Answer: COVID-19 has emerged, as somebody rightly says,‘the black swan event of the century’, with substantial macroeconomic impact both globally and in India. There was no way J&K Bank could have stood out. Its impact, especially during the first wave, was huge.

The exponential spread of COVID-19 led to almost an instantand marked fall in major indices, thereby significantly impacting economy and affecting GDP growth.

In our case, we too had our share of rough patch in the beginning of the pandemic but through subsequent re-positioning and re-orientation of business goals and service delivery mechanisms, we managed to register a considerableimprovement in most of critical indices of business.

That said, with a net annual profit of Rs. 432 Cr, that includes a 24-quarter-high profit of Rs. 316 Cr recorded for Q4 of FY 2020-21, I believe we have done quite well. Our business has grown to Rs 1.75 lac crore and our NPA Provisioning Coverage Ratio is close to 82% - one of the highest in the industry.

Q4. Had Covid-19 any impact on the net profit of the bank?

Answer: Running a business that too a banking business in a COVID hit atmosphere is like walking on a double edged sword. We had to strike a critical balance between continuity of life and sustainability of services. With resilience and a strong sense of commitment to serve our people, we succeeded in bringing a marked turnaround – showing a reasonably sound set of numbers, including a decent profitability figure despite COVID-19.

Though we withstood the test but in the process we lost some of our dedicated and honest members, and the contribution of these COVID MARTYRS will be remembered for all times to come.

Q5. What challenges do you foresee for the bank in the backdrop of Covid-19?

Answer: Personally speaking I believe the worst is over. The economy has started to come back on track, though it will take some time to regain the requisite momentum. The relief and rehabilitation measures includingrestructuring packages and interest subvention offered by the government of India and Government of J&K is evidencing signs of recovery and progression.

However, as far as talk of third wave is concerned, we have put all the necessary systems in place and are well prepared to deal with it.

I also firmly believe that respective governments at both center and UT levels have taken necessary steps and look convincingly prepared to handle its impact, in case it again hits the economy. However, that may to some extent impact credit growth. Besides, chances of COVID induced slippages, though remote, cannot be ruled out.

Q6. How does J&K Bank envisage the future of J&K economy in near future?

Answer: Considering the way things are shaping up, we are hopeful of a speedy economic revival and subsequent consolidation and growth. J&K Bank, being the prime financial institution of the UT of J&K and Ladakh, is ever-ready to render its services in changing fortunes of the people of UTs of J&K and Ladakh. At around two-third of the overall credit dispensation in these regions, consistently over last several decades now, our role is almost inherently vital.

With the support of governments of J&K and Ladakh, we believe, we can usher in a big change in the economic landscape of the two UTs through highly customized products that suit the needs of emerging businesses, entrepreneurs, end-to-end solutions for established commercial establishments, priority sectors like agriculture, horticulture, education and housing.

Besides, UT government is envisaging to fundentrepreneurial endeavors of at least 50000 youth under its flagship ‘Mission Youth’ Program. Being the flagship financial institution of the region, our role remains systemic for the region with a strong developmental orientation towards economic empowerment of the people, especially youth.

Q7. J&K Bank was once a cynosure of share market. What are your plans to make bank’s share one of the most sought after in the industry?

Answer: The question looks out of place in the current context when the J&K Bank share is hovering around Rs.40/=. That said, rise and fall, at times sudden and sharp, are the innate behavior of stock market. We as a company always strive to better our bottom-line, exploit our strengths and plug our weaknesses.

Sound fundamentals, government shareholding, raising of capital in near future and using Employee Stock Purchase Scheme (ESPS) as one of the modes to raise capital are the rudimentary factors that we look to capitalize on in furthering the brand J&K Bank and significantly improve our market perception.

Q8. J&K Bank is considered as one of the biggest employers in Jammu and Kashmir? Tell us about bank’s plans in this regard.

Answer: Since a massive recruitment drive has recently culminated with the absorption of more than 1850 talented and qualified youth in the services of the Bank as Probationary Officers and Banking Associates, I believe discussing possibility of further fresh recruitment, especially in the current scenario, is too early to talk about.

Q9. What are the career progressions plans for the staff?

Answer: Let me inform you that succession planning forms the core of our organizational excellence. We have a simple but at the same time well defined mechanism to prepare the bank for varied scenarios triggered by retirements on one hand and business expansion on the other. As such, the career progression that started from the management band shall be carried forward to other levels in the coming months to identify new leaders and successfully manage critical staffing transitions,.