70thannualreport of jk bank

8/14/2019 70thAnnualReport of JK BANK

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Annual Report 200708

ell me what I cando for you

I am listening

ell me what youwant to be when you grow up

ell me about your

plans and your pains

ell me about your leaky boat


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Contents02 Productisation of Financial Services

04 Apple

06 Dastakaar

08 Agriculture

10 Khatamband

12 Zafran14 Trump Card

16 Chairmans Statement

19 Board of Directors

21 Executive Committee

22 Happy Kashmir

25 Financial 2007-08

28 Directors Report

26 Management Discussion & Analysis

34 Auditors Report

35 Balance Sheet

36 Prot & Loss Account

37 Schedules to Balance Sheet

43 Schedules to Prot & Loss Account

44 Principal Accounting Policies

46 Notes on Accounts

58 Cash Flow Statement

59 Comments of C & AG

60 Report on Corporate Governance

Over the last seventy years the people o Jammu and

Kashmir have invested their emotions in J&K Bank.While we have never altered in giving them outstand-ing returns on equity, we may not have done quiteas well on the emotional coef cient.

Besides doing ethical and socially relevantbusiness and making pro ts or them, and ourselves,we are moving towards being an institution that eelsor its stakeholders.

We have so ar communicated with ourconstituents. Now we want to have a dialogue; aconversation with our customers. Listen to them.Not just about banking but about them and theirconcerns. Real people, real day-to-day issues. Peopleare to be at the centre o the new improved J&K Bank.

Today, we see a icker o hope in the state. Wewant to play a role in converting it into ul lment;the new optimism has to be converted into anopportunity; promises have to become per ormanceand cynicism has to give way to con dence. Only thenthe issues con ronting society and our economy willget addressed.

Be ore we aspire, as an institution, to lead, wehave to learn to serve. We have to listen, in order tobe heard. We have to understand, be ore we can act.We have to empathise, be ore we suggest

In all this, symbolism is the substance. J&K Bank seeks to symbolise a wider and deeper change in ourattitude to our work, to our ellow citizens and to ourstate and the nation. We have to collectively changelives and individually change society.

I am listening

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Capitalizing on the momentum generated by renewed businessstrategy adopted by our bank, we have moved ar ahead o showcasing only the vanilla product oferings. An institutionalprocess or productisation o all our nancial services has beeninitiated. Customising every nancial product in accordance withthe business scope, market needs while keeping in viewthe mindset o our customer base; we are trying to place theproductisation process in the larger socio-economic context o diverse economy like that o ours.

Agriculture, horticulture (especially apple), handicra ts,tourism, safron etc. are the orte o J&K economy. Keeping thisin view, we have, so ar designed a specialized oferings bouquetthat contains economy-speci c products like All PurposeAgri-term Loan, Apple Advance Scheme, Dastakar Finance, Cra tDevelopment Finance, Safron scheme and Giri Finance etc.

Given the extent o peoples involvement in various sectorso economy and the volume o business in monetary terms, J&K Bank has all along been alive to the needs and the requirementso the grass root level growers, artisans, cra tsmen etc. With astrong commitment towards the empowerment o J&K peoplethe bank is making eforts to broaden and deepen its nancialservicing areas through its customized product process, whereo everyone can participate in the development o J&K economybesides eeling empowered and becoming sel -reliant.

P R O D U C T P R O F I L E

Productisation of Financial Sevices

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P O S I T I O N

Apple, the king of Kashmir fruit, lies at the heartof horticultural economy of J&K state. Every yearhundreds of truckloads of apple reach the markets of Delhi, Punjab, Jaipur, Bangalore, Chennai andAhmedabad. Te potential yearly returns on the fruit,as per some of the ndings, stand at somewherebetween Rs 2000 to 2500 crores. Almost 2.5 millionpeople of the state are directly or indirectly associatedwith the apple business.

P R O B L E M

It is a matter of fact that the horticutureespecially apple business has a greatpotential. Te enormous potential of thissector has not been leveraged due to thegross under-nancing by the banks. Tishad provided the space for the middlemen,locally known as Aritees, to create a vicioussystem of exploiting the needs of small andmedium sized fruit growers.

Tese Aritees charge hefty rates of

return plus commission against the money provided in advance to the small fruitgrowers. Te growers, being indebted, areforced to sell their produce through theseAritees only thereby reducing theirbargaining power and ultimately theirprots. Tis halts the trickledown effectof the fruit economy. In absence of any nancial backing these farmers used to gettheir input materials like fertilizers andfungicides on credit that raised the costsand squeeze their margins further.

AppleApple Advance Scheme


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P O S I T I O N

Te handicrafts of Kashmir have always been asource of pride for its people. Tese famed worksof art have throughout history surpassed thebarriers imposed by geography.

Among all these versatile crafts, carpetweaving and shawl-making stand distinctively outboth in terms of exquisite craftsmanship andbusiness volume.

Handicraft and handloom sectors comprise a

major industrial activity in the state. Among theoldest industries of Kashmir, they support morethan ve lac people with an annual turnover of Rs. 2,000 crores.

P R O B L E M

However, artisans, craftsmen, andweavers have never been the realbeneciaries of the trade. Lack of capitaland their weak socio-economiccondition makes them vulnerable toexploitation by traders and middlemenor simply a moneylender, putting themat the mercy of these informalchannels of nance. Te cost of nance,in essence, far outweighs the gainsaccrued. Te artisans are bound by the harsh terms and conditions of themiddlemen and end up bowing totheir demands.

With the result, a large number of these craftsmen have shifted to unskilledlabour bringing this traditional industry to a decline.

DastakarJ&K Bank Dastakar Finance


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P R O D U C T

J&K Bank in its endeavour to promotetrade, industry and to preserve thetraditional arts and crafts of the statedevised a scheme aimed at the nancialneeds of the artisan community aptly called JK Bank Dastkaar Finance. Tescheme provides easy and soft creditto craftsmen engaged in the trade andhelps them to set up their own ventures,

weeding out the middlemen responsiblefor their exploitation. Keeping in view the specic production cycle associatedwith this trade the loan comprises of a term loan and working capitalcomponents.

P R O C E S S

Te disbursement is phased in quarterly installments and aligned to the statusof WIP (work in Progress). Tis ensuresproper end use, quality control andtimely completion of work. Te weavers/

artisans are allowed a reasonable timefor the repayment of the bank nance.o make the credit hassle free, no

collateral/third party guarantee isrequired. Te product has been designedon the banks philosophy of condence-based lending as opposed to collateral-based lending. Tere is no requirementof any collateral security under thisproduct. Te legal documentation hasbeen kept at bare minimum with only two documents to be executed fordisbursement of the loan.

In order to increase the reach of thisproduct the database of the weavers/artisans available with various tradeassociations is being utilized besidesidentication of people by concernedbranches of the bank.

P E R S O N

Abdul Qayoom Mir of Hamichi,Saidpora is a happy man these days.Smiling he says Free from the clutchesof the middlemen I no longer work foranyone but myself. It is all because of thenance I took from J&K Bank, as hasslefree and timely nance helped me savetime and earn better margins. Qayoomsays he earns more now because of the

Dastakar scheme. With a glint in hiseyes he dreams loudly about giving hischildren a better education and life.

A fellow artisan Manzoor AhmadMir says that earlier he couldntnegotiate the price of a shawl he hadprepared. As I had already borrowedfrom the middleman, he would ndfaults to lower the price further besidesthe agreed commission. I had no optionbut either to compromise on price orgo for a distress sale. Either way Iwould lose.

After availing the nance he proudly says that he can sell his product to thehighest bidder thus earning maximumprots.

Te artisans are happy as they seean end to the exploitation, which wasgradually forcing them out of thetrade itself.

P E R F O R M A N C E

Hamichi, Saidpora is a village comprisingof more than 200 families, all of whomare engaged in Sozni embroidery. Tey were completely unbanked until almostall of them availed the loans underDastkaar Finance. Te Zakura branchof J&K Bank in the city suburbs hasdisbursed 108 cases of Dastakar Financein one go while 80 cases are under

process.Te people of this small village aretalking about saving, getting a loan,installments, interest, prots- termsunknown to them earlier. Te awarenesshas also resulted to an awakening of akind. Tey are waking up to their needsto make a collaborative effort forcommon benets. Like sensing a needfor a market the artisans of the villagehave made a joint effort to form a groupto market their nished goods.

Te change does not only reect in

their tone but in their lives as well, asthey are all set to move towards anempowered and bright future thatawaits them.

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P O S I T I O N

Agriculture not only gives riches to a nation, but theonly riches she can call her own. Rightly said. Agrarianeconomy is also the most important component of J&Ksnancial system. Tus, agricultural farming includingthe lucrative horticulture sector and the related businesspractices, engage 65% to 70% of the state population.Considerably large workforce, both semi-skilled andun-skilled gets employment in this growing sector.

P R O B L E M

Te small farmers, who constitute thebackbone of this agro-based economy,have had many problems because of being marginalised. Although, this groupplays major role in the productivity but has all along been suffering dueto lack of nances for the cultivation,harvesting and marketing of their crop.It may be said that the institutionalmechanism of credit in rural areas hadnot been able to deliver.

AgricultureJ&K Bank All-Purpose Agri Term Loan


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P R O D U C T : J K B A N K A L L -

P U R P O S E A G R I T E R M L O A N

Te product aptly named as All-PurposeAgri erm Loan has been designed in away that lays special emphasis on smalland marginal farmers and providesuffi cient and, more importantly, timely nances to the farmers engaged in alltypes of agricultural and allied activities.Te product aims to cater to the needs of small farmers within very little land

holdings in the rural and semi-urbanareas of the state.

P R O C E S S

Te objective has been to provide easy nance to needy farmers throughregular channels of nance and towean them away from the exploitativecircle created by the non-bankingintermediaries. For that purpose, theproduct has been devised in such a way that hitherto un-banked customersget an easy access to banking services

through simple and affordabledocumentation process. A maximumcredit of Rs 1.00 Lakh, depending uponthe agri-activity to be nanced isprovided but multiple activities can alsobe considered for nance. Te product isoffered at affordable interest rates.

P E R S O N

Tis nance, which provides up toRupees 1 lakh, has beneted small fruitand vegetable growers effectively. Ithas helped them to have major shareof their earnings. Tere are number of beneciaries, who have had a chance toimprove their lives and their life-style.Farooq Ahmed Lone of BatwinaGanderbal gladly feels that he is oneof the privileged ones, to have had

availed this nance.He is happy to have escaped the

shackles of traditional lending system,Te middlemen eyed most of our protin return for the money we borrowedfrom them. He is satised with thisJ&K Bank endeavor to help them have adignied living. Now growers like himare able to send their produce directly into Mandi or at times outside the state.His fellow farmer, who also encashed thisopportunity, have similar sweet tales of success to tell. Such stories can be heard

everywhere in surrounding villages likeZazna, Ahan and Nawab-Bagh. For them,the entire process has been simple. Loneadmits, Tings like buying of seeds,pesticides and other requirements havebeen eased out and we get them at muchconcessional rates now, all because wehave the money with us. We feel moreindependent now.


In December 2006, in just two sittingswith the villagers, the Ganderbal Branchdisbursed Rupees Eighty ve lakh at thedoorsteps of ninety borrowers withminimal formalities. As of now, thisbranch has disbursed almost 4 Croresto more than 400 vegetable growers andnone of the monthly installments inthese cases are in arrears.

Tis product is available for farmers

of cereal Crops and vegetables,orchardists. it is also available tounemployed rural youth for setting upof small Dairy/Poultry units, in purchaseof seeds, pesticides/fertilizers, ploughanimals and farm Machinery. Tis seems just the beginning, as the fruits of thisharvest are expected to yield much. Testrengths of being a community bankwith a monopolistic presence are beingexploited more effectively so that theproduct reaches all the small-growersof the state. And with every loan

granted, we are having more andmore happy faces.


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P R O B L E M

Tey say, Te hands that decorated theabodes of the richest remained empty.

Despite having such a great potentialin the interiors industry, thishandicraft faces challenges at various fronts. Te biggest being the lackof requisite and timely nances. With

prices of the required timber rising, thecraftsmen receive only 10 percent of theadvances for the order they get; whileasthe rest of payments are made only afterthe completion of the work.

With the result, the cominggenerations of these people, especially the poor ones are losing interest in thisingenious craft. Te children of theexisting craftsmen are hesitant to adoptit as a profession.

P O S I T I O N

Introduced in Kashmir by the 14th century Muslim saintfrom Persia, Shah-i-Hamdaan, Khatamband is an art of designing ceilings with beautiful geometric tted-in woodenpatterns. Tese ingenious patterns are made of soft pinewood called r or Budhloo in Kashmiri. It gainedpopularity for its exquisite beauty and more so for itsinsulation property, which was essential, given the climatic

conditions of this place.Te uniqueness of this art lies in the fact that

Khatamband ceilings can be dissembled and re-assembledconveniently as per the requirements. It adds an ornamentallook to the already magnicent architectures. Tere arehundreds of designs for the Khatamband wherein artistsalso experiment with mirrors and colours.

Te houseboats in Dal Lake stand witness to themagnicence of this craft that attracts every eye around andwins over the aesthetic senses of every visitor. Presently,about ten thousand artisans are associated with it.

Now this art is even traveling to places like USA,Australia and many European countries as the local artisansare increasingly getting orders from foreigners.

P R O D U C T

Khatamband craft is a specializedcraft that provides employment to few thousand people. A special product wascustomized according to the needs of the Khatamband craftsmen. Te productwas tailored to provide comprehensiveand timely credit to them, based onproper understanding of the productioncycle and need for nance at its differentstages.

Te nance is provided as a revolvingfacility, eligible for enhancement every year on the basis on the turn-over.

KhatambandJ&K Bank Khatamband Finance


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P R O C E S S

Te product has been intentionally targeted at craftsmen aged between18-55 years, no collateral security isasked for and the documentationprocess has been kept simple. Teprospective borrowers have to only submit their identity proofs to availthe facility.

P E R S O N

Mohammad Ismail Najar (61) of CherariNambal, Safakadal, a frail old man, isa Khatamband craftsman. Te art hasdescended to him and Ismails three sonsare carrying it forward.

Ismail got a time-bound orderworth Rs 80000 with an advancepayment of just Rs 10,000. He availednances from the banks Safakadalbranch and only then was able tocomplete the order in time.

We earned good money after weavailed the loan under KhatambandFinance Scheme. It helped us to beindependent and we could purchasethe in-put materials against cash, whichsaved us at least 5 percent, says Ismailwith a smile of satised.


Te response to Khatamband Financeso far, has been impressive. It has againgenerated hope among the traditionalKhatamband craftsmen, especially smallones. Access to affordable nance is nolonger a problem for them. Kindlingsuch hope is the rst successful steptowards the revival of all such culturally rich arts and crafts.


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P O S I T I O N

Kashmiri Saffron the most expensive spice in the world has a unique aroma and avour. It is considered worlds bestbecause of its scientically proven superior quality, hencecommanding a price much higher than the saffron from any other part of the world.

Saffron is extensively used for culinary and colouringpurposes. Besides, because of its medicinal qualities, it is animportant ingredient for both traditional (Ayurvedic andUnani) and allopathic medicines. Its demand in the markets,both domestic and international, is growing.

Saffron is a niche-economy, involving hundreds of Kashmiri families. Still, the recent decline in saffronproduction is going to affect this segment of state economy.In 2003-04, around 6.98 metric tonne of saffron wasexported while as the exports declined to 5.19 metrictonne in 2004-05.

P R O B L E M

Although, saffron is considered a very protable cash crop, the middlemenhave plagued its trade, resulting inuneven distribution of returns. Withthe farmers being at the lowest rung of the ladder, the returns on saffron hardly trickle down to them. Tese middlemenprovide advances to farmers atexorbitant rates, thus suck them intoa vicious cycle of exploitation.

Farmers need timely nance forsaffron bulbs, fertilizers, fungicides,pesticides, irrigation, harvesting andpackaging besides other associatedactivities. Improper cultivation practicesas well as post harvest techniques forwant of nance have also badly affectedthe quality of saffron.

ZafranJ&K Bank Za ran Finance

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P R O D U C T

With a view of preserving this prizedspice, J&K Bank tailored a specicproduct named JK Bank Zafran Finance.Its purpose is to provide adequate,timely and need-based nance tosaffron growers.

Te scheme is for all saffrongrowers, especially the smaller andmarginal ones including even thecontract farmers engaging in orintending to start its cultivation. Tequantum of nance is proportionate tothe land holding of a grower. Teproduct also provides an additionalnance for post harvest and packaging.

P R O C E S S

Te disbursement is done in twophases; 60% in the rst year and 40%in the second, when the growers are inneed of funds.

Te repayment of the advance isscheduled within the four year growingcycle of saffron. Re-nancing facility can be availed for fresh plantation of the crop. Te documentation has beensimplied and kept minimum to makeit hassle-free.

P E R S O N

Mohammad Shaban, 60, a native of Pampore, has an emotional attachmentwith the Saffron land he inherited fromhis parents. Previously, I had to leaseout the land to a saffron grower for justpeanuts, as I didnt have any money toinvest. After availing the Zafran FinanceI am getting much better returns , saysShaban, who was thinking of disposingoff the land earlier but changed his mindafter availing the Zafran Finance.

We are mostly dependent onrainfall. Te amount and timing of raindecides the fate of a harvest. Tis hasbeen going on since long. Now, with thedecrease in rainfall, things are chang-ing. Only a few affl uent farmers havebeen able to dig bore wells but withZafran Finance it becomes easier, saysan 80-year-old saffron grower GhulamMohammad who has dug a bore wellafter availing the facility. He is hopefulof reaping rich dividends as experts say that proper irrigation can increase theproduction by upto 50 per cent.

Another grower Mir Ramzan Ahmadused to borrow money from a saffrontrader, who would then buy his produce.I was bound to sell the produce to himonly, even when he always paid me lessthan the market price. Besides, he wouldforce me to sell specially when the priceswere low. I had to bear this double lossevery year says Ramzan who afteravailing Zafran Finance waits for theright time to sell his produce so that heearns maximum prots. I am denitely earning more but I want to grow further, he adds.


Zafran nance has made themiddlemen and other informal channelsof nance unattractive for the saffrongrowers. Besides it has encouraged thesmall growers to withstand the priceuctuations because now they are notforced to sell their produce and they canwait till they are satised with the rates.With the much-needed direct nanceleading to the prosperity of some, othershave already made up their mind tofollow. Hence the product is in demandacross the saffron belts of the valley.


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L A Y I N G T H E F O U N D A T I O N

Deepening of nancial intermediation isa pre-requisite for sustained economicgrowth. We, at the bank, have given a new meaning to Inclusive Growth by working

on empowering people and demonstratingthat people with lesser means can bereached and reached protably. For us,making a difference in peoples livesand making prots cannot be mutually exclusive. We are therefore combining thesensibility of social enterprise with the formof a for-prot business.

A very novel initiative was started inthis direction, which proved to be quiteuseful in reaching out to almost every household of J&K. Te initiative was toprint the Ration Books for the Government.

Te State government annually prints anddistributes around twenty lakh ration booksto consumer families to facilitate thempurchase of rations from govt. owned fairprice shops. Practically every family in thestate gets a ration book including morethan 8 Lakh BPL families. Tese ration

J&K Bank Ration Card

books reach places where even roads dontgo. Te ration card, therefore, could beused as an ideal delivery vehicle to reachout to the unbanked people and to carry out the empowerment initiative throughan assured and established distributionnetwork active across J&K.

Our Strategy, Communications andDesign teams got together to design anaesthetically pleasant and functionally multi dimensional handbook that would

not only get the people their rations buta slew of nancial services as well. It wasfor the rst time a professionally designedration book, with a trendy look was madeavailable to the general public. And apartfrom ration coupons, the ration bookcontained pages on nancial education; abrief introduction to our various servicesand products. Not only that, customerrelationship forms for a variety of ourproducts like the Girl Child DepositProduct, All Purpose Agri-term loanetc were provided in the ration books.

Te results of this initiative were quiteremarkable. People in far-ung areas forthe rst time got something to read aboutthe nancial services options available tothem. And that too in their own mother-tongue. Armed with the simplied


rump Card

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application forms provided within theration book, they went to their nearestbranches to put their hard earned money to better use instead of keeping the cashat home. Many more even came forcredit. Vegetable growers, milk wallas,students aspiring to go for higher studies, young parents concerned about theirchild nancial security; all ocked downto our branches to avail the bankingservices.

Te ration books also containedPersonal Information coupons, whichhelped the bank create a database of around 20 lakh people. Te data wouldbe used for strategizing the Banksother initiatives aimed at economicempowerment.

Te bank spent quite a sum onprinting these ration books, which wasotherwise to be spent by the government.But the smiles on the faces of our peoplewere a return that was matchless!!!

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Chairmans Statement

Te dangers of managing a business (orfor that matter, an economy) in uncertainenvirons lie in under estimating the extentand intensity of the downside. Tere isan obvious upside to this and it can betempting to drive the business on the basisof what is likely to happen rather thanwhat could happen. However, taking

the latter route minimizes the risk, even asit leaves scope for some pleasant surprises.Tis in effect means that in the year ahead,conservatism would be the best coursefor Indian banks. Tis is the time tostrengthen internal systems and controlsand exploit productivity and effi ciencygains to enhance the bottom line.

Te year 2007-08 was one of the mostdiffi cult in recent times. Te list of economic woes was unending: surgingination, unprecedented oil prices,

deteriorating scal situation, reversingforeign investment ows and adepreciating rupee. o a large extent,external factors were responsible, butthe fact that the Indian economy has, ina matter of months, gone from being thepick of the emerging markets to a vulnerable one raises fundamentalquestions.

A di cult year has gone by and an uncertain one liesahead. Needless to say, managing a business in anuncertain macroeconomic environment is morecomplex than in an adverse year. This is true both roma policymaking perspective and rom an operationalone. As the looming uncertainty is not the result o asingle actor there can be no single answer, no elegantsolution, that will deliver a quick turnaround.


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It is now obvious that what we are

seeing is an overheated condition of theeconomy aggravated by adverse supplyconditions, from oil, food and othercommodities. Te situation can also beseen as part of the impossible trinityand as such is intertwined with capitalinows, exchange rate, and interest rates.Tis complex scenario makes policyformulation diffi cult. Te only recourse isto use monetary and other relatedinstruments, but these work effectivelywhen the scal side is well in control.With that not being so, the process of

managing the downturn is much morediffi cult, but not intractable.

Te critical point is that many of thesymptoms of the current economiccondition do appear to have a long- termdimension that poses risks for sustainablegrowth. However, to be clear, there is notthe least uncertainty about the economicfuture of India. In other words, thelong- term prospects are based onstructural advantages while the shortrun problems have arisen out of

situational inrmities.

Te method and manner in whichthese situational issues are beingaddressed almost exclusively throughmonetary policy interventions issure to result in the impact beingdisproportionately borne by the bankingsector. Indeed, from the manner in whichmonetary measures are being nuancedit seems clear that nancial sectorplayers will have to share a part of theadjustment costs.

Te mechanics of this are not far to seek.Tere is bound to be a rise in the cost of funds: advances yield will not adequatelycompensate the increased costsespecially when growth will slowdownand there is likely to be an upward trend

in impairment of assets. Tis will further

depress the advances yield and as suchmargins will come under pressure.

Te sector will continue to be plaguedby write downs, mark-to-market losses,and falling treasury income. Indian bankswill also see the full extent of losses onforeign exchange derivative contractsused to hedge currency risk.

In general, condence levels are low, anduncertainty about write downs continues.Tis has resulted in sharp corrections in

the banking sector. reasury operationsare likely to see higher mark to marketlosses and fee- based income will plateau.It is clearly not an easy time for anyonein the banking sector. Within the overallmacro-economic situation and itsattendant sectoral issues, what is thescope and strategy for the J&K bank?

For the last one year, in anticipation of the evolving situation, our goal has beento make our business model moreexible, so that even with a slower

economy and single-digit revenuegrowth, we achieve our long-termearnings targets. Te business modelthat we worked out three years agois yielding dividends in terms of itsexibility. So far, the Bank has managedto come through an increasinglydiffi cult period exceptionally well,largely because of our success withanticipating and providing for somediffi culties and policymoves. Our2007- 08 earnings were robust, netinterest margins were stable, impairment

was reduced, so was the cost to income,and return on equity and assets reachedmuch above peer group levels. Te Bankcontinued to be adequately capitalizedas we added our franchise, explored newbusinesses, and launched new productsand partners.


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While it may not be possible for a small

company like ours to deliver double-digitearnings indenitely, in the light of asustained downturn in the markets, J&KBank has built-in enough exibility toweather a short-term period of weaknessand still deliver the nancial returnsthat our investors expect. Our recentperformance has made the organizationmore optimistic, as strategic shifts in ourstrategy and internal reorganization havehelped us deliver the goods. Over thelast two years our organization hasbecome stronger, our implementation

has improved, and our employees havedeveloped a more positive outlook abouttheir work and the company. Tis, morethan anything else, has been the keyingredient in overcoming any macro-economic business cycle or sectoralstringency.

Haseeb A DrabuChairman & CEO

Tose who have kept track of the

evolving strategies and shifts in the Bankbusiness over the last three years shouldexpect us to leverage the autonomous,public-investment driven J&K growth, tolay the foundations for a contra-cyclicalstrategy of growth for the Bank. At thesub-national macroeconomic level, therehas been a big boost in infrastructurespending, with minimal leakage into thenational/global economy. As such, theasset growth in J&K has, on an average,been about 30 to 48 per cent over the lastone year and will continue at this rate

for the next 2-3 years. Te Bank plans togrow its business outside of J&K at theaverage sectoral rate of about 15 per cent.Tis, along with a 35 per cent growth inJ&K, would give the Bank an aggregativeasset growth of over 25 per cent.

Tis growth, along with a yield arbitrageof 300 basis points, will see that thepressure on net interest margins isminimized and protability maintained.However, we are factoring in a squeezeon the incremental net interest

margin, which is expected to dampen,if not nullify, through better liabilitymanagement. In other words, with a clearstrategy in place, one that is workingbetter than anticipated, there is need onlyfor a reaffi rmation of current strategies,structures and potential outcomes.

Our conservatism and consolidation of the last three years has paid off. In spiteof the short-term environment issues, wecontinued to invest. Te critical choicewe made was not to sacrice the medium

to long-term growth of the companyin order to meet a short-term goal, beit business, incomes or prots. Ourpriority is to ensure sustained long-termprotability.


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T H E B E A U T Y O F B U S I N E S S

Te most famous international brand of natural beauty is Kashmir. While it is agreat advantage, it has subsumed many other aspects of J&K; primarily, the presenceof life and potential of doing business. Tefocus on meadows and mountains, andlakes and gardens has put into shade thereality of existence in the state.

Yes, there is unparalleled beauty in every speck of Kashmir, there are, but , also realpeople doing real business. Tey toil to makea living; they sweat to eke out an existence,they use their creative abilities to create

unparallel crafts. Tey run industries, they manage enterprises. Tere is vibrancy intheir life and business.

At the J&K bank, while we adore thebeauty of the state, we admire the peoplesingenuity to do business.

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Notes

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70thannualreport of jk bank

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