HT interview: Our aim is to become a bank with best digital infrastructure, says J&K Bank MD Amitava Chatterjee

If you see the numbers, in spite of all that has happened in Jammu and Kashmir for the last six months, starting from the Pahalgam , we have reduced our NPA from March both in absolute terms as well as percentage terms

Jammu and Kashmir Bank, the biggest financial institution of the Union territory, is mulling a major leap to transform into a tech-bank and join the league of top banks with best digital infrastructure in the country. With 60 to 65% of its market share in J&K, the bank is also planning to revise its interest rates on several products, says MD J&K Bank Amitava Chatterjee who is completing his first year in the bank in an interview with Mir Ehsan. Edited excerpt

Amitava Chatterjee says that the J&K Bank maintained a healthy credit deposit ratio which is also known as loan to credit deposit. (Waseem Andrabi /HT)

As J&K bank is one of the leading banks of UT, what’s its current status of growth?

The bank had been growing at a moderate level of 10% both in deposits and advances and has also made good profits. If certain instances are removed then I believe that we have been increasing our profit almost by 15 to 20%. The trend that the bank has maintained over the last 12 to 14 quarters is still there.

In which sectors has the bank shown tremendous growth?

This year we recorded good growth in agriculture and horticulture. We introduced a new product in agriculture and were able to achieve our yearly targets in two quarters. Agricultural loan has resulted in a very good growth in the first two quarters. We have maintained a healthy credit deposit ratio which is also known as loan to credit deposit. We are probably contributing 80 to 90% in the government sponsored schemes.

Is bank helping the tourism sector which has been hit post post Pahalgam attack?

As far as tourism is concerned, it directly contributes 2 to 3% of our overall portfolio. We support the hospitality industry and also have a very good product related to homestays.

What’s the status of current NPA’s in the bank? Do we have big defaulters from outside J&K?

If you see the numbers, in spite of all that has happened in Jammu and Kashmir for the last six months, starting from the Pahalgam , we have reduced our NPA from March both in absolute terms as well as percentage terms. So, this bank has been doing well in containing and recovering the NPA’s for the last so many 10, 12 and 13 quarters and continues to do that. In future we will be further able to reduce NPA’S below 3% from the current percentage 3.32%.

Compared to other banks, why is J&K bank charging more interest rates?

I will not completely disagree with your statement but it’s not the average rate of interest that’s 10. 5%. It depends on which sector we are talking about. As, J&K bank has had almost a 60% market share in UT so there was no reason for the bank to rationalise the interest rate. Now, we are aware about the competition and the market demands. We are rationalizing our interest rates and very soon it will be aligned with the market.

You had recently announced scheme for defaulters. How was the response?

The success of the recent OTS scheme has been moderate as after its announcement several things happened here which might have compelled people to hold back because its validity was up to September only.

How the bank sees pvt sector and PSU banks as a threat to J&K bank dominating market share in UT and what measures bank is going to take in regaining the market share already lost to these banks?

The presence of other banks is giving us the opportunity to improve ourselves. We improve our services and delivery and improve our connection with people . So, I take it positively.

Is the bank improving its technology and facilities?

A. No organisation today can survive without technology, especially if it’s a banking organisation. People feel that the bank is introducing technology. So we are also investing in technology. My aim is to convert this bank into a tech bank and join in the league of big banks of country. It’s not possible in a short span of time because technology adoption requires coordination with many stakeholders, tenders, software developers, hardware suppliers, our own teams and also following the proper processes. Our bank might have been be a little bit in the implementation but now we are going very strong. The basic technological requirements have already been put into place. It will take one year.

There are concerns of shortage of staff and overburdened counters?

The average number of employees per branch in the industry is 10 and for our bank it’s 12. So, the myth that we have a shortage isn’t true. Second, if you look the other way, other data that can help you to understand that what I am saying is correct. If you look at the ratio of employee cost to total cost of a bank it’s one of the highest in Jammu and Kashmir bank in the industry. So, obviously we are not short on staff that’s proved. Over a period of time we have not been rationalising the staff properly. We are in the process of rationalizing it , this will be completed in the next 3 to 6 months.

What measures bank is taking to address the growing mistrust among the existing customers due to deficient services owing to staff shortage at branches?

There was a time when 80 to 90% market share belonged to this bank , it has come down to 60%. So our people never felt that they needed to reach out to anybody, they always felt that people would come to them . You feel that business is coming automatically. With the new banks, the scenario is different. They are attracting the customers, whereas, out staff felt that the customers will come to them given the name of the bank. We are changing this.

How is the bank changing?

We are converting our branches from service points to sales and service points. That’s one project we have already undertaken and it is being implemented.

Are locals or outsiders big bank defaulters whose accounts have turned into NPA’s?

If you look at the total NPA of this bank it’s 50-50 shared between what’s there in Jammu and Kashmir and what’s outside J&K. But if you consider proportion of NPA’s to the total business, it’s higher in rest of India. Proportionately our business is divided 30% in rest of the India and 70% in J&K and if you consider the proportion of NPA it is much lower in Jammu and Kashmir. Now, the NPA in rest of country as I said are all legacy NPA’s which were created way back in 2014, 2015, 2016. We have not added any in the recent three to five years . So, big defaulters are all from legacy accounts, but the good part is we have been able to resolve and recover many of those accounts.

Why do banks seek government employees as guarantors?

It was something which has happened over the period of time because people felt that a government employee will be a good guarantor. I can safely say that this is a wrong practice and we have already instructed people to stop this

Is there a slump in the market across J&K especially from the past couple of years?

I won’t say that there is a slump, had there been a sump , the bank wouldn’t have grown. If you look at the rate of growth of the GDP of Jammu and Kashmir, is is in line with the country’s GDP growth. However, there were some incidents that affected the primary sectors of this state--horticulture, tourism. So, at times the growth is hampered by these events. Otherwise, banks can grow only as much as the state grows . We used a new product in agriculture that is called YUVA. It’s an entrepreneurship scheme and we are the only bank which is supporting that scheme. It’s a government initiative and we are the financing partner.