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Informist, Thursday, Nov. 7, 2024

By Sagar Sen

MUMBAI – Jammu and Kashmir Bank plans to raise up to INR 10 billion through additional tier I or tier II bonds in Jan-Mar, Baldev Prakash, managing director and chief executive officer, said Thursday. "It will be growth capital, mainly for credit growth," Prakash told Informist on the sidelines of the Business Standard BFSI event.

In 2022, the bank had raised around INR 10 billion through Basel-III-compliant tier-II bonds. As of Sept. 30, its Basel III capital adequacy ratio was at 14.99%.

In October, J&K Bank reported a net profit of INR 5.51 billion for Jul-Sept on account of faster growth in interest income. Prakash said the bank has taken many initiatives and the robust financials are sustainable for the foreseeable future.

His comments come soon after local industry officials made allegations against the Srinagar-headquartered lender about persistently failing to meet its priority sector lending targets. The Federation of Chambers of Industries Kashmir argued that this stifled economic growth, job creation, and entrepreneurship development in the Union territory.

"As of Sept. 30, J&K Bank’s priority sector lending shortfall had reached an alarming Rs 8,372 crore (INR 83.72 billion). This unutilised capital could have been channelled into supporting local businesses and driving economic activity, which now fears that the region’s development is being severely hindered by the bank’s neglect,” the Federation of Chambers of Industries Kashmir said.

Incidentally, while there is pressure on the bank to increase local operations, Prakash said there is no immediate plan to expand the branch network. Currently, the lender has over 1,000 branches.

With reference to the concern raised by the Reserve Bank of India and the finance ministry about credit growth outpacing deposit growth, Prakash said the bank is comfortable with its current credit-deposit ratio of 69.71% as of Sept. 30.  End

Edited by Rajeev Pai

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