Breaking silence over sacking of former J&K Bank chairman Parvez Ahmed, the state
Government on Wednesday said the decision was taken afterthe Reserve Bank of India (RBI) expressed concern over “governance issues” inthe state’s premier financial institution.
“Let’s be very very clear that we haven’t acted againstJ&K Bank. The RBI gave us the letter that they are extremely concernedabout governance issues in J&K Bank and these issues have been pending inspite of repeated requests from the RBI, and therefore we were forced to removethe CMD (Chairman and Managing Director) of the Bank,” Chief Secretary BVRSubrahmanyam told a press conference held by Governor Satya Pal Malik onachievements of his administration in the past one year.
The Chief Secretary said they have picked a J&K Bankofficial on seniority basis as interim CMD.
“It is not final but we will have a search committee andsome of the best names in the country, ex-Governors of RBI have been spokento,” said Subrahmanyam.
He said a three-member committee will be formed to pick thenext CMD. The Chief Secretary said J&K Bank was the crown of the state. “Itis shining glory of this state and therefore it is important that this Bankregains its glory. The ACB (Anti-Corruption Bureau) carried out raids as therewere old complaints about irregularities and appointments. J&K Bank has ahistory, what and on whose recommendations people were being appointed,” headded.
He said there were written documents showing how people hadbeen appointed under CSR.
“How do you appoint people under CSR in a bank? It can bedone in a government. A bank is not an employment agency. A bank is first andforemost a bank and it is custodian of your, my and government’s money. And theprimary responsibility of a bank is to take care of that money,” said the ChiefSecretary.
He said a bank is not a charitable institution. “It is amisnomer. That is the fundamental objective from which the J&K Bank hadmoved away and that is what RBI meant when it kept on saying that there aregovernance issues with the Bank,” said the Chief Secretary.
Divulging details, the Chief Secretary said the J&K Bankhas spent Rs 50 crore on golf courses under the CSR.
“My government gave it Rs 500 crore last year as capital subsidy.Is it the business of a bank, which requires government money to beoperational, to spend Rs 50 crore on renewal of golf courses where less than1000 people play?” he said.
“Please write about it…that it (golf) is an elite sport.There are people in disagreement with me at the top. Go and ask people inDowntown how many of them play in golf courses. The Bank has 80 lakh accounts.How many of them play in golf courses….spending Rs 50 core on restoration ofgolf courses is unacceptable for the Bank. Had it earned Rs 2000 core profitthere will have been no question on that (spending on golf courses). But it issurviving on government money. I am saying this with full authority of theGovernor that the Bank will be protected and it will be made a shining Bank,”said the Chief Secretary, adding the Bank will be run by people of J&K.
“We are interested in it becoming an internationallyrenowned Bank but be a bank first and bank last. Wait for three months and youwill see results flowing from this Bank,” he said.
In response to a question, the Chief Secretary said theJ&K Bank has no choice but to come under the RTI as it is agovernment-owned Bank and registered under the Companies Act as a GovernmentCompany.
The Chief Secretary revealed that the post of Chairman andManaging Director will be separated. “They will be on different committees sothat Bank works under checks and balances. All systems should haveaccountability. This Bank is now moving in the right direction. Everybody’smoney is safe. Let’s be very very clear about it. The Bank is healthy and it isin good shape,” he said.