JKB on Sale ..... Top Secret Govt. enquiry into JK Bank hints scam; indicts top officers. Srinagar: A top secret state government enquiry into the alleged mismanagement in J&K Bank has not only confirmed large undeclared non-performing assets but also indicted some very senior officials of the Bank including an Executive President and a Vice President. Despite being in the know of all the facts, the state government, which owns 53 per cent of the bank, has not acted upon the report in any manner. The report a copy of which is with the Kashmir Monitor, refers to an “alarming increase” in accounts having over dues of more than 60 days. The report puts the figure of overdue accounts at “Rs 4,500 crore”. It has warned that the continuation of the services of the some of the officers can prove disastrous for bank and would expose the Bank to serious risk and irreparable loss. The secret enquiry in the affairs of the J&K Bank was initiated by the state government in June, after valley’s leading daily Greater Kashmir reported on 29-05-2014 that the Bank had not fully declared its bad loans. Pointing clearly to mala fide and giving it the dimension of a scam, the report explains how the corporate accounts have been accommodated in violation of basic banking principles and regulatory norms. Sample this: “J&K Bank continued to lend money to the company (REI Agro) as unsecured credit facilities aggregating Rs 650 crores. No specific purpose for lending has been established by the bank and the exposure went on increasing mainly on account of attempts to conceal the real problems of the account”, reads the paragraph on the company, a case that is fit for fraud and forensic audit. Similarly, “facility of Rs 100 crore sanctioned in favor of Jain Infrastructure was irregular from the very beginning. Against all established norms, classification of the account as NPA was postponed by sanctioning of loan of Rs 50 crore in favour of its subsidiary with a longer repayment period. New loan was utilized for part adjustment of original loan of Rs 50 crores.” “On the basis of preliminary investigation conducted by us it has come to surface that there is sufficient substance in the news report. Jammu and Kashmir Bank has not in any effective manner denied the veracity of news item and in the clarification circulated in local newspapers, the management of the bank had admitted that one of the accounts having credit facility of around Rs 700 crores is not in standard category”, the report reads. The report names top officials of the Bank namely Executive President Abdul Hamid Bandey, Vice President recoveries Ashraf Ali for the current mess in the credit portfolio of the Bank. The report hints that there is a collusive nexus between the two and an unnamed Delhi Zone head in the management and settlement of NPAs. It also has been found out that they may have their own firms to which distressed assets have been sold at throw away prices causing a huge financial loss to the bank. “A deeper enquiry revealed that Branch Managers and Zonal Heads are being pressurized for submitting remission and settlement proposals even though adequate securities are available for recovery of the outstanding loans. This route is followed in case of settlement of large corporate loans of branches located outside the state”, the report reads. Further, “Huge commissions are reported to be garnered by Mr. Hamid Bandey and Mr. Ashraf Ali, Vice president recoveries, posted in Delhi zone. Incidentally, the main reason for the present unhealthy status of loan portfolio of the Bank can be attributed to failure of both Mr. Hamid Bandey and Mr. Ashraf Ali to monitor the credit portfolio of the Bank”, the report adds. By GO WH ER
Posted on: Tue, 12 Aug 2014 12:04:55 +0000
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