J&K Bank, headquartered in Srinagar, the capital of Jammu & Kashmir, functions as a universal bank in India’s northernmost state and as a specialised bank in the rest of the country. Mushtaq Ahmed spoke to Jibran Buchh on the bank’s initiatives in the infrastructure space.
What is J&K Bank’s role in infrastructure funding?
J&K Bank is very active in infrastructure finance as also in project finance. In fact, we want to consolidate J&K Bank Financial Services Ltd, a 100 per cent subsidiary of J&K Bank. The company has been established, approval has been sought, and one or two formalities need to be completed. Once we have this body we will go all the way.
What is your bank’s specific role in project finance?
A major chunk of project finance from J&K Bank goes to power projects and one of the projects we financed recently was the Baglihar hydropower project (phase-II) to the extent of Rs.700 crore. The money will be disbursed in phases as per the requirement. In next two to three years, we will be funding small power projects via equity.
Government of India is already funding a lot of projects in J&K, in railway and road sectors. To support these large projects, ancillary support like construction equipment e.g. trucks, dippers etc. will be required to give shape to these major projects.
Some economists have suggested that forex reserve should be invested in infrastructure development.
Well, when a country has an international trade system one needs to have forex reserve too. It’s not possible to operate an economy in isolation of overall international events, maybe a part of it but not whole reserve.
Can you give us an overview of J&K Bank as it stands today?
J&K Bank has a diversified portfolio wherein the credit portfolio of 62 per cent remains outside the state and 38 per cent within the state of J&K. The main source of economy remains agriculture and horticulture, to some extent power sector, and now MSMEs in Jammut. Outside the state we have exposure to all sorts of industries in manufacturing and infrastructure.
The focus of J&K Bank outside the state is do business with companies with good track record like large financial and corporate houses.
We are into infrastructure but in certain areas we participate in multiple banking and consortium where the lender is some public sector bank or a private sector bank. Apart from this there are some areas where we do finance exclusively as sole bankers.
What are some of the bank’s recent initiatives?
There were some issues pertaining to human resource and there was a shortage of ATMs too. This has been sorted out with addition of staff and increase in ATM networks. We also expanded our branch network. Around 90 new branches are operational in J&K. This has helped a lot in financial inclusion.
What is your opinion on micro credit?
We must bring the population into the fold of micro credit. There are people who might need Rs.5,000 or Rs.10,000. One may see growth of the economy but a huge chunk of population is left behind. They should be part of the growth story and must reap the benefits of the growing economic prosperity.