JK News Today
Jammu, November 25:
Concerns have been raised in some quarters about the decision taken by the SAC regarding the J&K Bank. The concerns mainly relate to the operational autonomy of the bank.
Responding to the concerns expressed in media, an official spokesperson clarified that the SAC decision has three main elements:
a) The J&K Bank being treated as a Public Sector Undertaking
b) The J&K Bank being brought under the ambit of the Right to Information (RTI) as a consequence
c) The J&K Bank to follow CVC guidelines
d) The J&K Bank to be accountable to the Legislative Assembly like other PSUs and it’s Annual Report being laid on the floor of the house.
The spokesperson clarified that as far as treating J&K Bank as a PSU is concerned, it is just a matter of fact and only restating the obvious. The spokesperson further clarified that since the state government holds 60% of majority shares in the Bank, for all practical purposes, it is a Public Sector Undertaking. Therefore all transparency and accountability features that arise from this have to apply to the bank.
The main elements of transparency comes through the application of the RTI Act. With this, all recruitment and administrative issues if the J&K Bank would be subject to transparency provisions, like all Public Sector Banks of GOI.
As far as following CVC guidelines are concerned, these are followed by all government owned banks. They bring about a certain probity into banking decisions. It may be pointed out that J&K Bank was recently fined Rs 3 crores by RBI for not following KYC/ Anti-money laundering norms. CVC guidelines will ensure better adherence in future to RBI norms.
The spokesperson further clarified that the only other decision taken by the SAC is to place the Annual Report of the Bank in the State Legislature through the Finance Department. In any case, the Annual Report of the J&K Bank is placed in the public domain through newspaper and website of the Bank after every year’s Annual General Meeting.
The spokesperson further explained that since the State Government hold almost 60% share of the Bank; it has the characteristics of a Public Sector Undertaking. Only a couple of years back, when the bank was faced with a severe financial crisis, the State Government came to its rescue by infusing capital worth Rs. 532 crores. Further, the Bank gets a lions share of government business. Therefore, placing the Annual Report in the State legislature like any other PSU is natural. As far as accountability to the legislature is concerned, this is normal for all government owned banks and is a very limited exercise. Commercial decisions of the bank are not a subject matter of legislative control.
Incidentally, the J&K Information department has received thousands of messages welcoming this decision.
The spokesperson asserted that the Government has no intention of interfering in the day to day affairs of Banks. The functional autonomy of the J&K Bank with its Board of Directors as its supreme decision making body remains unquestioned. Further, it will continue to be regulated by the RBI. Extension of RTI Act and CVC guidelines will only promote Good Governance and transparency as the Bank has often been questioned on both these counts by the general public.
