Politics debunks banking in J&K Bank

Kashmir Magazine

Shafqat Bukhari

Removing Parvez Ahmad from the position of Chairman-Cum- Managing Director this year and withdrawing a State Administrative Council (SAC) decision taken to change Jammu & Kashmir Bank into a Public Sector Undertaking (PSU) under tremendous political pressure last year shows the state government’s increasing intervention in the working of the Jammu & Kashmir Bank. The intervention was unwarranted last year but not this year the replacement of the Chairman-Cum-Managing Director was welcomed to the extent of stopping the unstoppable political intervention in the working of the bank. While the fact remains that from 1996 onwards political regimes have set the precedence of appointing their loyalists on the coveted position of Chairman-Cum –Managing Director, it also a fact that prior to 1996 the Jammu & Kashmir government would always appoint any senior officer of the Commissioner Secretary rank as Chairman-Cum-Managing Director of the bank and it would also appoint a senior scale KAS officer as general manager presently designated as Executive President to hold the charge of the personnel and administration departments of the bank. So there was a dual control of state government over the administration of the bank till 1996. Unfortunately Farooq Abdullah as Chief Minister of the state set the precedence of politicising the bank in the year 1996 with the appointment of his die hard loyalist Mohammad Yousuf Khan as Chairman-Cum-Managing Director of the bank. No doubt Mohammad Yousuf Khan the diehard loyalist of Farooq Abdullah performed well to take the bank to new heights and even Farooq Abdullah’s successor Mufti Mohammad Sayeed granted extension to Khan in view of his excellent showing as the Chief Executive of the bank, but the politicization of the top management of the bank ruined the administrative and business operations of the bank slowly and steadily. Though the precedence of politicizing the bank was also carried forward by the Mufti Mohammad Sayeed led PDP-Congress coalition government which appointed its die hard loyalist Hasseb Drabu as the chief executive of the bank but undisputed fact is that during the tenures of both M Y Khan and Haseen Drabu allegations of back door appointments surfaced. The only point of satisfaction during the tenures of Khan and Drabu was that nothing went wrong in the conduct of business operations of the bank.



The Jammu & Kashmir Bank went into raw hands after Omar Abdullah led NC-Congress coalition government appointed a retired in house officer Mushtaq Ahmad as Chairman of the Jammu & Kashmir bank. It was during the tenure of Mushtaq Ahmad that allegations of mass recruitments and advances of huge loans to the close affiliations of top political leaders and serving bureaucrats surfaced and pandemoniums by the then main opposition party PDP in the assembly triggered debates over the working of the bank. In the year 2011 an agreement by the Omar Abdullah led Jammu & Kashmir government with the Reserve Bank of India that divested the Jammu & Kashmir bank of its power to deal with the general banking business of the state government triggered a huge controversy over the financial autonomy of the Jammu & Kashmir state.


The agreement mandated the RBI to carry out the general banking business of the Jammu and Kashmir Government and act as the sole agent for investment of the government's funds. The previous Mehbooba government appointed Parvez Ahmad as Chairman –Cum Managing Director of the bank and within a year of his taking the charge mass allegations of backdoor appointments rocked the state assembly in the year 2017 and 2018 the time when the bank was grappling with the issue of loan recovery matters. Reports about legislators and their affiliations, traders and some serving and retired bureaucrats turning chronic bank defaulters hit the newspaper headlines. The fall of Mehbooba government followed by the appointment of Satya Pal Malik as new Jammu & Kashmir governor saw the then Chairman Jammu & Kashmir Bank Chairman coming under clouds over backdoor appointments.




The row triggered over the recruitments was resolved with the Jammu & Kashmir Bank agreeing to issue a supplementary select list on the intervention of Governor Satya Pal Malik. The government intervention in the affairs of the Jammu & Kashmir Bank never headed for a dead end as State Administrative Council (SAC) headed by Governor ordered the enforcement of its decision to change the bank into a Public Sector Undertaking (PSU) which triggered a huge controversy last year. After the protests and threats of an agi¬tation by political parties, the governor ordered withdrawal of the SAC decision. The trouble did not head to any dead end till Parvez Ahmad was removed early this month and Jammu & Kashmir Government controlled Anti-Corruption Bureau (ACB) raided the corporate headquarters of the bank. Now Anti-Corruption Bureau is probing the allegations on the directions of Reserve Bank of India (RBI) and Chief Secretary is talking about the appointment of one Chairman and one Managing Director to introduce dual control in Jammu & Kashmir. No doubt the appointment of a separate Chairman and a Managing Director would bring about a system of checks and balances in the working of the bank but the apprehension of governor’s administration fiddling with the autonomy of bank is very much there and governor’s administration will have to take critical decisions on the working of the bank without giving chances to any new controversy over the financial autonomy of the bank.