Jammu and Kashmir Bank Ltd
Directors Reports
To the Members,
Your Board of Directors has pleasure in presenting the 85th Annual
Report of your Bank, together with the audited Balance Sheet, Profit and Loss Account and
the report on business and operations for the year ended 31st March, 2023.
Performance at a Glance
The aggregate business of the Bank stood at Rs.204323.19 Crore
at the end of the financial year 2022-23.
The total deposits of the Bank grew by Rs.7327.36 Crore from
Rs.114710.38 Crore as on 31st March, 2022 to Rs.122037.74 Crore as on 31st March, 2023, a
growth of 6.39 percent.
CASA deposits of the Bank at Rs. 66017.98 Crore constituted
54.10 percent of total deposits of the Bank.
Cost of deposits for current FY stood at 3.79 percent.
The net advances of the Bank stood at Rs.82285.45 Crore as on
31st March, 2023.
Yield on advances for the current FY stood at 8.91 percent.
Average Priority sector advances stood at Rs.32,800.26 Crore as
on 31st March, 2023.
The Bank effected cumulative cash recovery, up- gradation of
NPA's and technical write-off of Rs.8762.71 Crores during FY 2022-23.
Investment portfolio of the Bank stood at Rs.34829.15 Crore as
on 31st March, 2023.
Insurance Business
The Bank earned a commission income of Rs. 70.69 Crore from Insurance
Business by mobilizing a business of Rs 568.2 Crore in life insurance (including fresh
retail life business of Rs 155.17 Crore, Credit life business of Rs 96.68 Crore and
renewal business of Rs 316.35 Crore) and Rs 245.66 Crore in non-life insurance during
financial year 2022-23.
Income Analysis
The Interest income of the Bank stood at Rs.9355.11 Crore in the
year 2022-23. Interest expenses stood at Rs.4609.83 Crore for FY2022-23. The Net Interest
Income stood at Rs. 4745.28 Crore for FY2022-23.
The Net Income from operations [Interest Spread plus
Non-interest Income] stood at Rs.5502.09 Crore in the financial year 2022-23.
The Operating Expenses registered an increase of Rs.50.82 Crore
during the financial year 2022-23 and stood at Rs.3643.60 Crore as compared to Rs.3592.78
Crore in 2021-22.
The Cost to Income ratio (Operating Expenses to Net Operating
Income) stood at 66.22 percent in the financial year 2022-23.
Gross Profit
The Gross Profit for the financial year 2022-23 stood at Rs.1858.49
Crore.
Provisions
The Provision for Loan Losses, Standard Assets, Taxation and others
aggregated to Rs.661.11 Crore in the financial year 2022-23.
Net Profit/Loss
The Bank registered a Net Profit of Rs.1197.38 Crore for the financial
year 2022-23.
Dividend
In view of the overall performance of the Bank and while retaining
capital to support future growth, the Board at its meeting held on 4th & 5th May,
2023, recommended dividend of 50 per cent for the financial year 2022-23 for approval by
the shareholders at the 85th Annual General Meeting. If approved, the total outflow on
account of dividend for the year 2022-23 will be Rs. 51.57 Crore. The record date for
payment of dividend is mentioned in the notice of the ensuing 85th AGM of the Bank. In
terms of the Income Tax Act, 1961, the dividend income is taxable in the hands of the
Members. Therefore, the dividend will be paid to the Members after deduction of applicable
tax, if any.
In terms of Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Bank has formulated and adopted a Dividend
Distribution Policy with the objective of appropriately rewarding Shareholders through
dividends while retaining the capital required for meeting regulatory capital
requirements, maintaining adequate buffers and supporting its future growth. The said
Policy has been hosted on the
website of the Bank at https://www.jkbank.com/investor/
stockExchangeIntimation/corporateGovernancepolicies.php.
Branch/ATM Network
During the financial year 2022-23, 10 new branches were established,
thereby taking the number of branches to 990 (including IARBs) as on 31.03.2023, spread
over 18 states and 4 union territories. The area-wise breakup of the branch network
(excluding extension counters/ mobile branches and Service branches) on the basis of
census 2011 as at the end of FY 2022-23 is as under:
Area |
Business
Units (including IARBs) |
Metro |
174 |
Urban |
110 |
Semi-Urban |
162 |
Rural |
544 |
Total |
990 |
During the financial year FY 2022-23, 5 EBUs/USBs were established
taking the total number of EBUs/USBs to 82 and 17 ATMs were added taking the ATM network
of the Bank to 1421 as on 31.03.2023.
Capital
The capital management framework of the Bank includes a comprehensive
internal capital adequacy assessment process conducted periodically, which determines the
adequate level of capitalization needed to meet the regulatory norms and current and
future business needs.
The capital management framework of the Bank is complemented by the
risk management framework, which covers the business and capital plans and stress testing
results integrated with the internal capital adequacy assessment process while assessing
its impact on the capital ratios and adequacy of capital buffers for current and future
periods.
As at March 31, 2023, the Subscribed and Paid-up Capital of the Bank
stood at Rs.103,14,79,861.00 comprising of 103,14,79,861 equity shares, which is
9,85,93,267 equity shares more than as at March 31, 2022. The said capital was raised by
way of:
Allotment of 2,85,93,267 equity shares at a price of Rs.32.70
which was at a discount of 4.97% (i.e. Rs.1.71 per equity share) to the Qualified
Institutional Buyers (QIB) aggregating to a total amount of Rs.93,49,99,830.90. The Issue
opened on March 28,
2022 and closed on March 31, 2022. The allotment was made on April 01,
2022, and
Allotment of 7,00,00,000 equity shares at a price of Rs.39.25 to
the eligible employees of the Bank under J&K Bank Employee Stock Purchase Scheme,
2023 (JKBESPS 2023) amounting to a total of Rs.274,75,00,000.00.
Employees Stock Purchase Scheme Jammu and Kashmir Bank Employee Stock
Purchase Scheme, 2023 (JKBESPS, 2023) was approved and implemented by the Bank and shares
were granted to the eligible employees in accordance with guidelines applicable to ESPS.
The Statutory Central Auditors have however issued a qualified opinion with respect to the
funds raised through ESPS. For Management Response to the observations of the Auditors,
please refer to Corporate Governance Section of this Report. The Bank has received a
certificate from the Secretarial Auditor of the Bank pursuant to Regulation 13 of the
Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 and the same is available on the website of the Bank at https://
www.ikbank.com/investor/investorlnfo/ESPS.php
Net Worth and Capital Adequacy Ratio (CRAR)
The Net Worth of the Bank stood at Rs.8323.67 Crore on 31st
March 2023.
Capital Adequacy Ratio under Basel III stood at 15.38 percent as
on March, 2023. The tier I component of CRAR is 11.04 percent as on 31st March 2023.
Adjusted Book Value per Share for the financial year 2022-23
stood at Rs.67.76.
Board of Directors
Your Bank has Nine (9) Directors consisting of MD & CEO, Executive
Director and 7 Non-Executive Directors as on 31st March. 2023.
Independent and Non-Independent Directors
Non-Independent Executive Director
Mr. Baldev Prakash (DIN: 09421701), Non Independent Executive Director
has been serving as the MD & CEO of the Bank since December 30, 2021, with the
approval of Reserve Bank of India (RBI). Mr. Sudhir Gupta (DIN: 09614492), Non Independent
Executive Director has been serving as the Executive Director of the Bank since December
14, 2022, with the approval of Reserve Bank of India (RBI).
Non-Independent Non-Executive Director
Mr. R K Chhibber is the Non-Independent Non-Executive Director of the
Bank.
Independent Non-Executive Director
In terms of the definition of 'Independent Director' as prescribed
under Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Section 149(6) of the Companies Act, 2013 and based on the
declarations/disclosures received from the Directors, the following Non-Executive
Directors are Independent Directors:-
1. Dr. Rajeev Lochan Bishnoi
2. Mr. Naba Kishore Sahoo
3. Mr. Umesh Chandra Pandey
4. Mr. Anil Kumar Goel
5. Mr. Anand Kumar
6. Ms. Shahla Ayoub
All Independent Directors of the Bank have given their respective
declarations stating that they meet the criteria of independence as laid down under the
applicable laws and in the opinion of the Board, the independent directors meet the said
criteria.
Appointments/Resignations from the Board of Directors
During the FY 2022-23, there were following changes in the composition
of the Board:
Mr. Vivek Bhardwaj, IAS (DIN: 02847409) was appointed as Govt.
Nominee Director w.e.f May 17, 2022 in place of Mr. Atal Dulloo, IAS (DIN: 03542909).
Dr. Mohmad Ishaq Wani (DIN: 08944038) ceased to be the Director
on the Board of the Bank w.e.f. August 24, 2022 consequent upon his non-re-appointment at
the 84th Annual General Meeting of the Bank.
Mrs. Sushmita Chadha (DIN: 02939808) resigned as an Independent
Director on the Board of the Bank w.e.f. September 27, 2022 due to her personal reasons.
Mr. Nitishwar Kumar (DIN: 05326456) resigned as a Director on
the Board of the Bank w.e.f October 13,2022.
Mr. Sudhir Gupta (DIN: 09614492) was appointed as an Executive
Director on the Board of the Bank w.e.f. December 14, 2022
Ms. Shahla Ayoub (DIN: 09834993) was appointed as Independent
Director on the Board of the Bank w.e.f. December 26, 2022
Mr. Vivek Bhardwaj, IAS (DIN: 02847409) ceased to be the Govt.
Nominee Director on the Board of the Bank w.e.f. January 25, 2023 consequent upon
withdrawal of his nomination by the Government of UT of Jammu and Kashmir.
During the year under review, Mrs. Sushmita Chadha, Independent
Director and Mr. Nitishwar Kumar, IAS resigned from the Board of the Bank w.e.f. September
27, 2022 and October 13, 2022 respectively due to their personal reasons before the expiry
of their tenure. Further, it has been confirmed by the said Directors that there were no
material reasons other than personal reasons for their resignations.
The Board acknowledges the invaluable contributions rendered by the
outgoing Directors during their tenure as Directors on the Board of the Bank and places on
record deep appreciation for their invaluable contribution/ guidance as Members of the
Board.
Changes in the Board of Directors after the Closure of Financial Year
Mr. Pawan Kotwal (DIN: 02455728) was appointed as an Additional
Director on the Board of the Bank on July 24, 2023.
Directors seeking appointment/re-appointment at AGM
Mr. Pawan Kotwal (DIN: 02455728), Additional Director on the Board of
Bank being eligible has offered himself for appointment as Director liable to retire by
rotation. Mr. R K Chhibber (DIN: 08190084), who is retiring by rotation, has offered
himself for re-appointment. The profile and necessary details of the above mentioned
Directors have been included in the Corporate Governance Report.
Appointments/Resignations of the Key Managerial Personnel
Mr. Baldev Prakash, Managing Director & Chief Executive Officer,
Mr. Sudhir Gupta, Executive Director, Mr. Pratik D Punjabi, Chief Financial Officer and
Mr. Mohammad Shafi Mir, Company Secretary are the Key Managerial Personnel of the Bank.
Mr. Sudhir Gupta was appointed as Executive Director of the Bank in the
Board meeting held on December 14, 2022. Mrs. Rajni Saraf was appointed as Chief Financial
Officer of the Bank on April 27, 2022 in place of Mr. Balvir Singh Gandhi, who ceased to
be the Chief Financial Officer of the Bank. Mr. Pratik D Punjabi was appointed as Chief
Financial Officer of the Bank to be effective from the date of his joining i.e. July 01,
2022 in place of Mrs. Rajni Saraf, who ceased to be the Chief Financial Officer of the
Bank after attaining the age of superannuation on June 30, 2022.
None of the Key Managerial Personnel has resigned during the year under
review.
Changes in the Key Managerial Personnel after the Closure of Financial
Year
There were no changes in the Key Managerial Personnel after the closure
of Finalcial Year.
Number of Meetings of the Board
During the year under review, Seventeen (17) Board Meetings were held,
in due compliance with statutory provisions, on the following dates:
08.04.2022, 27.04.2022, 12.05.2022, 16.06.2022,
28.06.2022, 13.07.2022, 10.08.2022, 24.08.2022,
26.09.2022, 21.10.2022, 15.11.2022, 14.12.2022, 26.12.2022,
23.01.2023, 20.02.2023, 06.03.2023, 15.03.2023.
Committees of the Board
The Bank has following Committees of the Board:
Management Committee
Audit Committee
Special Committee of Board on Frauds
Stakeholders Relationship Committee
Information Technology Strategy Committee
Corporate Social Responsibility & Environmental, Social and
Governance Committee
Integrated Risk Management Committee
Customer Service Committee
Nomination & Remuneration Committee
Legal and Impaired Assets Resolution Committee
The compositions, powers, roles, terms of reference, etc. of aforesaid
Committees are given in detail in the statement on Corporate Governance annexed to this
report.
Performance Evaluation of the Board
The Nomination and Remuneration Committee (NRC) has approved a
framework / policy for evaluation of the Board, Committees of the Board and the individual
Members of the Board (including the Chairperson). In conformity with the said policy
requirements, following is the process of evaluation:
The performance evaluation of all the Independent Directors is
conducted by the entire Board excluding the Director being evaluated.
Independent Directors evaluate the performance of
Non-Independent Directors, Chairperson of the Board, Whole Time Directors and Board as a
whole and submits its report to the Board alongwith necessary comments and suggestive
course of action arising out of the evaluation.
The performance evaluation of the Committees of the Board is
conducted by the entire Board.
A questionnaire for the evaluation of the Board, its Committees and the
individual Members of the Board (including the Chairperson) designed in accordance with
the said framework and covering various aspects of the performance relating to the
following is forwarded to individual Directors:
Board |
Board
Composition & Quality, Board Meetings & Procedures, Board Development, Board
Strategy & Risk Management, Board & Management Relations, Succession Planning and
Stakeholder Value & Responsibility, etc. |
Committees
of the Board |
Functions
& Duties, Management Relations, Committee Meetings & Procedures, etc. |
Chairman
of the Board |
Managing
Relationships, Leadership, Role & Responsibility, etc. |
Whole
Time Directors |
Participation
at Board / Committee Meetings, Managing Relationships, Knowledge and Skills, Personal
Attributes, Contribution towards growth, Leadership and Initiative. |
Individual
Directors |
Participation
in meetings, managing relationships, knowledge & skills & personal attributes,
etc. |
The responses received to the questionnaires on evaluation of the
Board, its Committees, individual Directors including Chairperson are consolidated and
discussed by the Board.
Your Bank has in place a process, wherein, declarations are obtained
from the Directors regarding fulfillment of the 'fit and proper' criteria in accordance
with the RBI guidelines/ Companies Act, 2013. The declarations from the Directors other
than Members of the NRC are placed before the NRC and the declarations of the Members of
the NRC are placed before the Board. Assessment on whether the Directors fulfill the said
criteria is made by the NRC / Board on an annual basis.
Fiscal Year
The Fiscal Year for the Bank is reckoned as starting from 01st April to
31st March every year.
Lead Bank Responsibility:
J&K Bank is the only Private Sector Bank in the Country assigned
with responsibility of convening UT Level Bankers Committee - UTLBC meetings. The Bank
continued to satisfactorily discharge its Lead Bank responsibility in 12 districts of UT
of J&K, i.e. Srinagar, Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag,
Kulgam, Pulwama, Shopian, Poonch and Rajouri. Lead bank responsibility in other 8
districts of the UT, i.e. Jammu, Samba, Kathua, Udhampur, Reasi, Doda, Ramban and Kishtwar
is assigned to State Bank of India.
The Annual Credit Plan for UT of J&K for FY 2022-23 was launched on
1st April 2022, envisaging a total credit target of Rs.50,790.08 Crore for 16,51,877
beneficiaries. During FY 2022-23 banks operating in UT of J&K have disbursed total
credit of Rs.60,048.27 Crore in favour of 17,16,527 beneficiaries, registering an
achievement of 118% in financial terms and 104% in physical terms. This includes
disbursement of Rs. 26,411.85 Crore in favour of 9,60,347 beneficiaries against the annual
target of Rs.40,342.37 Crore for 13,38,894 beneficiaries under Priority Sector and
Rs.33,636.42 Crore in favour of 7,56,180 beneficiaries against the annual target of
Rs.10,447.71 Crore for 3,12,983 beneficiaries under NonPriority Sector thereby registering
achievement of 65% and 322% in financial terms respectively.
J&K Bank was assigned annual target of Rs.25,324.42 Crore for
8,32,205 beneficiaries under Priority and Non-Priority Sectors of economy during FY
2022-23 against which Rs.39,270.12 Crore were disbursed in favour of 12,14,233
beneficiaries registering an achievement of 155% in financial terms and 146% in physical
terms.
During the FY 2022-23, following meetings were conducted:
7th Meeting of J&K UTLBC held on 22nd June, 2022 to review
the performance of Banks/ FIs in UT of J&K in dispensation of credit and other banking
services during the Financial Year ending 31st March, 2022.
8th Meeting of J&K UTLBC held on 19th October, 2022 to
review the performance of Banks/ FIs in UT of J&K during the quarter/ Half Year ending
September, 2022.
9th Meeting of J&K UTLBC held on 2nd March, 2023 to review
the performance of Banks/ FIs in UT of J&K during the quarter ending December, 2022.
Special Meeting of J&K UTLBC held on 22nd November, 2022 to
take the general review of the performance of Banks/ FIs in UT of J&K.
Steering Sub-Committee of J&K UTLBC held on 12th October,
2022 to monitor SHG-Bank Linkage Programme
Two Meetings of Steering Sub-Committee of J&K UTLBC held on
25th August, 2022 and 6th February, 2023 to finalise the agenda for meetings of J&K
UTLBC
Convening of District Level/ Block level meetings as per Lead bank
Scheme
Lead Bank ensured that District- level and block level meetings, such
as DCC/ DLRC/ BLBC, and other relative meetings under Lead Bank Scheme are held as per
schedule in all the 20 districts of UT of J&K during the FY 2022-23.
Implementation of Financial Inclusion Plans (FIPs):
Reserve Bank of India initiated the concept of Financial Inclusion by
setting up the Khan Commission in 2004 and later on mooted a campaign under Financial
Inclusion Plan to make efforts to provide financial services to the financially excluded
segment of the society. Accordingly "Swabhimaan" campaign to cover 74,000
identified villages in India with population more than 2000 (as per census 2001), was
launched by Government of India in February 10, 2011. Consequently, a total of 795
villages in J&K State having population of over 2000 (FIP-I) but without banking
facilities were identified by the concerned Lead District Managers/ Lead Bank Officers,
and accordingly allocated to 5 major banks for providing banking services by March 2012.
After providing coverage of banking services in all the identified 795 villages, RBI
advised SLBCs to prepare a roadmap covering all unbanked villages of population less than
2000 (FIP-II) and notionally allot these villages to banks for providing banking services
in a time-bound manner. Accordingly, a total of 5582 villages having population less than
2000 were identified in J&K State, and allocated to 5 major banks operating in
J&K. All the allocated villages in this segment stand covered by providing Banking
service outlets in the form of Bank Branch/ Banking Correspondents or other Modes of
coverage.
Subsequently, FIDD RBI issued direction to all SLBC Convenor Banks to
identify the villages, with population more than 5000 (FIP-III), which do not have a Brick
& Mortar Branch of any Scheduled Commercial Bank and allocate the same among the
Scheduled Commercial Banks operating in the state for opening of branches. All the
identified 104 villages' stands covered by Brick & Mortar branches or CBS-enabled
Banking outlets.
Reserve Bank of India in consonance to Government of India Sub-Service
Area (SSA) plan envisaged to provide Banking Touch Point (Bank Branch/BC/IPPB) within a
radius of 5 KMs of every village across the country. In this connection, National
Informatics Centre (NIC) in the year 2019 conducted a GPS (Latitude/ Longitude) based
verification of Banking Touch Points across the country on the basis of the details
uploaded by banks on Jan Dhan Darshak App - (GIS App) and a list of 11,278 uncovered
villages across the country was arrived at and shared with respective SLBCs/ UTLBCs in the
month of October 2019 for opening Banking Touch Points.
For UT of J&K 147 villages were identified as Uncovered (Phase IV).
All the 147 villages stand covered by banking touch points.
Department of Financial Services, MoF, GoI identified 363 unbanked
villages with population more than 3000 across the Country for opening of Brick and Mortar
branches and in the matter SLBCs/ UTLBCs were requested to allocate the locations among
the member banks for opening of branches and monitoring the progress thereof. Out of the
total 363 locations, 10 locations (Phase V) have been identified in seven districts of UT
of J&K of which 7 villages stands covered.
Responsibility of setting up of RSETIs in UT of J&K:
In terms of guidelines issued by Ministry of Rural Development,
Government of India, setting up the Rural Self Employment Training Institutes (RSETIs) in
all the districts of UT of J&K was assigned by J&K UTLBC to two banks, viz.
J&K Bank and SBI as per their Lead Bank responsibility. Accordingly, J&K Bank has
set up 12 RSETIs in its allocated 12 lead districts (Srinagar, Ganderbal, Budgam,
Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama, Shopian, Poonch and Rajouri).
Performance of RSETIs in conducting training programmes and the number of persons settled
and benefited through credit linkage is being reviewed in Quarterly UTLBC meetings.
Responsibility of setting up of FLCs in UT of J&K:
In terms of RBI guidelines for setting up of Financial Literacy Centres
(FLCs) in all the districts of UT of Jammu and Kashmir, J&K Bank has made 12 FLCs
operational in its 12 allocated lead districts viz. Srinagar, Ganderbal, Budgam,
Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama, Shopian, Poonch and Rajouri and
SBI having made 8 FLCs operational in its 8 allocated lead districts of UT of J&K,
viz. Jammu, Samba, Kathua, Udhampur, Reasi, Doda, Ramban, Kishtwar. In addition, PNB,
JKGB, EDB and J&K State Cooperative Bank have also established 6, 2, 2 & 1 FLCs
respectively, in various districts of UT of J&K, which as on 31.03.2023 takes the
total number of FLCs in the UT of J&K to 31. The performance of FLCs in conducting the
Financial Literacy Camps as per the guidelines from RBI is being reviewed at various
forums including quarterly UTLBC meetings.
100% Saturation Drive for KCC
Banks/ FIs in J&K have issued 54,929 fresh KCCs during FY 2022-23
involving an amount of Rs.557.23 Crore. This includes Rs.289.45 Crore disbursed in favour
of 26,352 beneficiaries under KCC Crop and Rs.267.79 Crore to 28,577 beneficiaries under
KCC-AH& F.
With the above achievement during FY 2022-23 the total number of active
KCCs in J&K has reached to 9,28,504 as on 31.3.2023 with an outstanding credit of
Rs.6,777.06 Crore.
Performance of Associate /Subsidiary Companies Subsidiary:
As on March 31, 2023, the Bank has one unlisted wholly owned subsidiary
namely, JKB Financial Services Limited (JKBFSL) which was incorporated on August 27, 2008.
JKB Financial Services Limited was floated with the objective to primarily meet the
para-banking requirements of J&K Bank customers in particular and other customers of
the UT of J&K in general. JKBFSL is a member of the National Stock Exchange of India
Limited (NSE) & The BSE Limited (BSE). As a leading broking entity
in the Union Territory of J&K, JKBFSL at present provides a wide range of financial
services to its clients which include;
Equity Broking Services: JKBFSL provides broking services in equity
(cash/delivery, intra-day, futures and option). As a part of broking services offered by
the company, JKBFSL also facilitates opening of DEMAT accounts for its clients.
Margin Trading Facility: JKBFSL is providing margin-trading facility to
its clients for leveraging their eligible collaterals by funding their requirements on the
cash-delivery segment of equities in NSE. The exposure is provided as per the norms set by
SEBI and other regulatory bodies.
Gold ETF: JKBFSL is providing the facility to its customers for buying
and selling Gold ETF. This product being an exchange-traded fund can be bought and sold
only on stock exchanges, thus saving investors from the trouble of keeping physical gold.
The transparency in pricing/purity is another advantage. Exchange Traded Funds are
open-ended mutual fund schemes based on the ever-fluctuating cost of gold. Gold ETFs give
investors exposure to the gold market, they are an excellent choice of investment for
investors with conservative risk profile as gold as an asset is less volatile when
compared to equities.
Initial Public Offer: To complement its broking business, JKBFSL also
facilitates its client's participation in the IPO's undertaken by various companies. To
provide these services, the company uses the ASBA platform of J&K Bank through offline
mode. However, the Company is working on the application that will enable client to apply
for IPO through Mobile Application.
Third Party Product Distribution: JKBFSL undertakes distribution of
third party products like mutual funds and ETF's according to its client's requirements.
The company provides such distribution through online channels as well as through the BSE
Star Mutual Fund platform. JKBFSL has recently launched a mobile app called JKB mGrow,
which offers better user interface and experience for distributing mutual fund products.
Performance highlights of the JKBFSL during the financial year 2022-23:
Income:
The total income of the Company surpassed 100 Million mark
during the financial year 2022-23 & grew by 6% from ' 991.25 lakhs to 1046.39 lakhs.
Income from MTF (Margin Trade Funding) is '255.91 lakhs for the
financial year 2022-23 as compared to 180.42 lakhs in FY 2021-22 thereby registering a YoY
growth of 42 %.
Revenue from 3rd party products has been marked as a growth area
for the company.
The company has recorded AUM growth of around 82% on YoY basis and
accordingly the mutual fund commission grew from ' 22.37 lakhs in 2021-22 to '53.89 in
2022-23 thereby recorded a YOY growth of 141%.
The income from Equity broking for the financial year 2022-23 is
' 510.55 lakhs & the cash market
trading volumes of the company during the year remained in line with
the market.
The depository income during the financial year 2022-23 reached
at 121.57 lakhs.
Expenditure:
The total expenses during the financial year 202223 is '879.22
lakhs as compared to ' 590.03 lakhs in the previous financial year. Total expenditures
have increased by 49% YOY basis. The substantial increase in the total costs on YOY basis
was mainly because of employment costs due to regularisation of the services of employees
of the company & investments made in technology platforms during FY 2022-23.
Profits:
The Company registered a profit before tax of 167.16 lakhs
during the given financial year and the net profit achieved was 120.65 lakh during the
same period.
Associate:
Regional Rural Bank Sponsored by J&K Bank: J&K Grameen Bank
The J & K Grameen Bank ( JKGB) has come into existence on 30th June
2009 with the issuance of statutory notification by Gol, MoF, Department of Financial
Services under subsection (1) of section 23 (A) of the Regional Rural Banks Act, 1976 vide
F. No. 1/4/2006-RRB providing for amalgamation of 'Kamraz Rural Bank' and 'Jammu Rural
Bank' into a single new Regional Rural Bank under the name of J & K Grameen Bank with
its Head Office at Jammu and has commenced business effective from 01.07.2009.
Area of Operation:
The area of operation of the J&K Grameen Bank comprises of 13
districts of the UT of J&K and UT of Ladakh viz. Baramulla, Bandipora, Kupwara,
Ganderbal, Srinagar Jammu, Kathua, Rajouri, Poonch, Samba, Kishtwar, Leh and Kargil.
No. of Branches
(as on 31st March, 2023) : 215
No. of Employees
(as on 31st March, 2023) : 1161
(includes 12 officials on deputation from J&K Bank - Sponsor Bank).
Capital Structure:
In terms of the RRBs Act 1976, the authorized capital of Regional Rural
Banks was fixed at ' 5.00 Crore (which stands amended to ' 2000 Crore in terms of the
Regional Rural Banks (Amendment) Act, 2015 notified in the Gazette of India on
12-05-2015). The issued and paid up capital of the J&K Grameen Bank is ' 97.16 Crores
fully subscribed by the Central Government, State/ UT Government and Sponsor Bank in the
ratio of 50:15:35 respectively.
Besides during FY 2022-23 Bank has received an additional capital
support of ' 287.79 Crores from its promoters in the prescribed ratio of 50:15:35 till
March 31, 2023, which was kept under Share Capital Deposit Account. The details of Bank's
total Capital of ' 384.96
Crores as on March 31, 2023 are given hereunder:
Authorised
Capital |
' 2,000 Crores |
|
Particulars |
Paid up
Share Capital |
Share
Capital Deposit |
Total
Capital |
Share of
Government Of India |
48.58 |
143.90 |
192.48 |
Share of
Government of U.T of J&K |
14.57 |
43.17 |
57.74 |
Share of
J&K Bank (Sponsor Bank) |
34.01 |
100.73 |
134.74 |
Tier II Perpetual Bonds : Date of issue: 04-12-2014
Out of total cost outlay of Rs. 23.34 Crores for implementation of 100%
CBS by JKGB, 50% i.e. ' 11.67 crore has been shared by J&K Bank (Sponsor Bank) in the
form of perpectual debt (bonds).
Business Performance of the J&K Grameen Bank as on 31.03.2023
Total Business:
The total business of the bank as on 31st March 2023 stood at ' 8513.30
Crores against '7646.50 Crores as on 31st March 2022, thereby registering a growth of
11.34% during the financial year 2022-23.
Deposits:
The deposits of the bank have increased from ' 4767.90 Crores to '
5268.76 Crores during the financial year 2022-23 thereby registering a growth rate of
10.50%.
Advances:
The gross advances of the Bank as on 31st March 2023 stood at '3244.54
Crores as against ' 2878.60 Crores as on the corresponding date of the previous year
recording a growth of 12.71%.
CD Ratio:
The C.D. Ratio of the bank has increased by 121 bps from 60.37% as on
31st March 2022 to 61.58% as on 31st March, 2023.
Priority Sector Advances:
The Priority Sector Advances outstanding as on 31st March 2023 stood at
' 2595.45 Crores against ' 2327.61 Crores outstanding as on 31st March 2022, registering a
growth of 11.51 % on Y-o-Y basis. RRB specific benchmark of 75% portion of priority sector
advances to total advances outstanding has been well maintained with 79.99% as on 31st
March, 2023.
NPA Management:
Gross NPAs of the Bank as on 31st March, 2023 stood at ' 147.51 Crores
(4.55%) against ' 152.07 Crores (5.28%) as on 31st March, 2022. Accordingly Net NPAs as on
31st March, 2023 stood at ' 55.89 Crores (1.77%) against ' 69.75 Crores (2.49%) as on 31st
March, 2022.
Business per Employee:
The business per employee as on 31st March 2023 stood at ' 7.33 Crores
against '6.78 Crores as on corresponding date of the previous year.
Business per Branch:
The business per branch as on 31st March 2023 stood as '39.60 Crores
against ' 35.24 Crores as on corresponding date of the previous year.
Profitability:
The Bank has incurred a net loss of ' 51.63 Crores as on 31st March,
2023, which is mainly due to the pension provision liability of ' 117.61 Crores during the
year 202223.
Advertising and Publicity
During the FY 2022-23, we have been successful in strengthening the
bond of trust with all our stakeholders by leveraging all the means and channels available
for uninterrupted communication throughout the financial year. The Bank's products,
services and facilities were successfully advertised and publicized in the form of
mass-media campaigns across the operational geographies of the Bank. Also, the advertising
campaigns initiated by the Bank to increase in the overall business, while meeting the set
targets, were duly publicized with proper follow-up communications. Also, the functioning
and accomplishments of the Bank were effectively communicated to relevant target audiences
including major stake-holders, customers, shareowners, other stakeholders and general
public through customized and efficiently packaged messages/hand-outs using mass media
within J&K and Ladakh, besides rest of the country to earn high credibility and
enhance our brand image.
To leverage the power of internet for reaching out to a wider audience,
we successfully increased our presence in the social- media universe further by
strengthening and streamlining our online presence through highly popular mediums of
social connectivity platforms especially Facebook, Twitter, Instagram, YouTube and
LinkedIn.
Brand Building
Brand perception forms the fulcrum of any communication plan, which is
devised to complement the Bank's business strategy. Therefore, in line with the Bank's
vision to scale up its business and expand presence in rest of the country while deepening
its foot-prints in Jammu & Kashmir and Ladakh (JKL), we aligned the Brand Building
campaigns accordingly to better leverage Bank's success in financial and institutional
terms. With an established identity and image in the JKL market, our focus remained to
enhance Bank's position and boost its brand appeal in aesthetically vibrant terms to
complement its financial standing. While as in rest of the country, we successfully
increased our brand exposure activities during the FY 2022-23 both on and off-line thereby
enhancing Bank's brand awareness, deepening its brand perception and increasing its brand
value.
During the FY 2022-23, the Bank undertook various promotional
activities to position its brand further favorably among the people, complementing
ever-strengthening significance of our institution on financial landscape of JKL and
beyond. While Brand J&K Bank continues to hold the sway among the people, Bank has
ensured to put an effective and efficient communication strategy in place to reinforce the
brand recall.
While the thrust for using digital channels to communicate to the
people has been mandated in the face of ever changing technological landscape with Bank
enhancing its digital footprints by leveraging its presence on social media platforms, it
has increased usage of traditional advertisement genres like outdoor advertising (OOH)
through hoardings to garner better mileage in terms of brand visibility and reach. A
well-drilled brand visibility enhancing activity was carried out by displaying Bank's
products and schemes at ATMs/CRMs & Branches while making sure Glow Signboards-an
important tool of brand identity-are properly maintained. Hoardings were placed in twin
cities of Jammu and Srinagar, national
highways and other key locations across all major towns and areas of
JKL and rest of the country.
Moreover, people-centric and environment-friendly initiatives commenced
under CSR during FY2022-23 were properly highlighted to earn public goodwill, strengthen
the trust and bond between Bank and its stakeholders, and create a continuity in the
positive perception about the Bank.
While doing all this, the key components of brand identity like logo,
its colors, font, and other aspects were properly utilized and placed to strengthen the
brand loyalty among the stakeholders.
Awards & Certifications received by the Bank during FY 2022-23
J&K Bank's illustrious history of more than eight decades is
decorated with awards and accolades. Over the years, the Bank has collected numerous
honors in various categories. During the FY 2022-23, the Bank outperformed its competitors
to grab the headlines in following categories;
1. Award from Housing and Urban Development Corporation Ltd (HUDCO) for
its outstanding contribution towards housing sector under PM Awas Yojana for FY 2022-23.
2. Awarded as Best MSME Bank by Chamber of Indian Micro, Small and
Medium Enterprises (CIMSME) at MSME Banking Excellence Awards
3. MSME Friendly Bank Award by CIMSME at MSME Banking Excellence Awards
4. Award for Government Schemes Implementing Bank by CIMSME at MSME
Banking Excellence Awards
5. Best Branding Bank Award by CIMSME at MSME Banking Excellence Awards
6. Best Bank for Implementing COVID Schemes at MSME Banking Excellence
Awards - 2022 organized by CIMSME
7. Award for outstanding performance in promoting digital payments at
Digital Payments Utsav organized by Ministry of Electronics and Information Technology,
Government of India at India New Delhi
8. CSO 100 Award - 2022 at CSO100 Awards & Symposium - 2022 from
Foundry India, an Indian chapter of Foundry - an IDG Inc.
9. Special Cyber Security Award 2022 on Access and Identity Management
for its Privilege and Customer Authentication Framework from Foundry India.
10. Certification of prestigious ISO 27001:2013 from Intertek - a
reputed London-based Total Quality Assurance provider - for being compliant with the best
industry standard in terms of privacy and security protocols.
Corporate Social Responsibility (CSR) Policy
As a responsible corporate citizen, J&K Bank envisions to integrate
its strategic intent and business goals with the needs of the society in order to achieve
an inclusive, sustainable and harmonious environment. This represents the core principle
and forms the basis of the Bank's CSR policy.
The Bank, guided by the founding principles of its CSR policy, takes
and encourages initiatives aimed at improving the lives and living conditions of the
vulnerable sections of the society besides lending support to the society's endeavors
aimed at
making the world a better place to live in.
In line with the same, the Bank continued its 'social investment' by
undertaking projects of varied nature to alleviate the hardships of different sections of
the society and address issues of environmental sustainability. In turn, the Bank reaped
benefits in the form of increased emotional equity, brand-connect and goodwill.
During the financial year FY2022-23, the Bank continued to intervene
and enhance value creation in the society through CSR activities in consonance with its
mission of 'Serving to Empower'. While CSR initiatives undertaken during FY2022- 23 have,
directly or indirectly, benefitted hundreds of thousands of people across UTs of J&K
and Ladakh, some eco-centric activities have contributed towards reducing carbon footprint
and encouraging green energy solutions. The statutory disclosures with respect to the
CSR&ESG Committee of the Board, including a report on the CSR, forms part of this
report at Annexure 1. The key areas of intervention and the activities undertaken under
CSR by the Bank during the FY 2022-23 are detailed as under:
Key areas of intervention under the CSR programme
a) Healthcare
b) Education
c) Community Development
d) Ecology & Environment
e) Employment Generation & Skill Development
f) Promotion of Sports
Details of activities undertaken under CSR during the FY
2022-23
Healthcare
Ambulance to Government Psychiatric Hospital Jammu
Realizing the indispensable role of ambulance services in emergency
pre-hospital medical care, patient transfer, ease of access to health services
particularly to underprivileged, the initiative of providing ambulance to the Psychiatric
Hospital, Jammu under Corporate Social Responsibility (CSR) was taken up by the Bank.
The Govt. Psychiatric Diseases Hospital (GPDH) Jammu, a tertiary care
hospital of psychiatric diseases catering to the whole Jammu division, had just one
ambulance (8-year old) to cater to a huge rush of patients. Notably, the Hospital also
provides 24-hour psychiatric emergency services on all days. The Ambulance provided under
Bank's CSR will go a long way in bettering the existing infrastructure of the hospital in
so far as 'ferrying the patients and attend to the emergencies in the hospital and also to
shift patients to GMC Jammu and associated hospitals round the clock' is concerned.
Mobile Charging Stations in premier hospitals
In an attempt to ease the sufferings of general public, the Bank
installed 45 Mobile Charging stations at three prominent government- run hospitals (SMHS
Hospital Karan Nagar, Children's Hospital Bemina and Lal Ded Maternity Hospital) of
Srinagar city for convenience and facilitation of patients/ attendants visiting the
Hospital's OPD or those admitted in IPDs.
Installing phone-charging stations inside these hospitals will provide
much needed relief and support to patients
and attendants alike especially in desperate times of health
emergencies. Besides, the three premier health facilities apart from treating hundreds of
admitted patients on daily basis, cater to a monthly OPD footfall of over two lakh people
in a month, which further adds to the utility of such stations in these facilities.
Apheresis kits to children suffering from blood cancer and other blood
dysfunctional diseases
The incidence of Blood Cancer has seen alarming rise in Kashmir valley
over the years thereby necessitating the need for Apheresis Kits (Platelet/ Therapeutic
kits with ACD and saline) to ensure treatment of the diagnosed patients. Pertinently, the
poor and the under-privileged find it hard to mobilize finances for procurement of these
kits, especially considering the fact that the treatment/expenditure for this disease is
not covered under "Ayushman Bharat/Golden Card Scheme".
The Bank Understanding the need collaborated with SK Institute of
Medical Sciences Srinagar (SKIMSS), Srinagar, and provided apheresis kits to 90 deserving
child patients suffering from cancer and other blood dysfunctional diseases so as to make
a difference in the lives of these underprivileged patients.
Pertinently, SKIMSS is the only hospital in J&K that caters
exclusively to the pediatric oncology patients from Jammu, Kashmir & Ladakh and treats
around 350 pediatric cancer patients every year.
Sponsoring 50 TB patients from Kargil, Ladakh under Pradhan Mantri TB
Mukt Bharat Abhiyan
The government of India under The Pradhan Mantri TB Mukt Bharat
Abhiyaan is committed to eliminate TB in India by 2025. Struggling to achieve its TB
elimination target, the Union Health Ministry launched a campaign inviting citizens,
non-governmental organizations and the corporate sector to sponsor monthly food baskets
for TB patients who require good quality nutrition to tame the infection in the month of
September 2022. There are identified food baskets for adults and parents, which the
sponsor can fund through the district- level officials managing the TB programme.
The Bank realizing the importance of this mission and in consonance
with the Ministry of Health and Family Welfare, GOI's directive for corporates and other
organizations, collaborated with Kargil Health Authorities to provide such support to 50
TB patients for one year.
Construction of fabricated structure for convenience of patients and
their attendants at ENT OPD of SMGS Hospital
Considering the Bank's commitment towards community development and
improving allied infrastructure related to healthcare with a larger objective of
contributing our bit to add convenience to people, Bank undertook the project of
constructing a fabricated structure on modern lines fitted with turbo ventilators to bring
relief to the poor patients and their attendants waiting for their turn at the waiting
area of ENT-OPD at SMGS Hospital, a leading government healthcare facility in Jammu city
that caters to the health assistance needs of tens of thousands of patients annually.
Education
Setting up of Computer Laboratory at Bhartiya Vidya Mandir, High School
Udhampur
To complement the efforts of Bhartiya Shiksha Samiti J&K in the
field of education, Bank, after assessing the need, set up a computer lab for the benefit
of underprivileged students receiving education from its Udhampur based Bhartiya Vidya
Mandir High School, located on the banks of holy Devika River in Nianso village.
In place to mention that Bhartiya Vidya Mandir High School Udhampur is
one of the 36 schools run by Bhartiya Shiksha Samiti across the UTs of J&K and Ladakh
(most of these schools are located in remote areas like Kishtwar, Doda, Leh & Kargil
districts). A reputed NGO, registered with Ministry of Corporate Affairs for undertaking
CSR activities, Bhartiya Shiksha Samiti is working in the field of education and is
running a chain of schools for the students belonging to poor and weaker sections of
society. Samiti provides basic infrastructure in most of these schools like transport
facility, furniture, science laboratories, computer labs, libraries, meeting halls etc.
These schools called as 'Bhartiya Vidya Mandirs' provide quality education to the students
by creating a healthy educational and cultural atmosphere.
The students of the said school, right from pre-primary to tenth class,
were found to be in dire need of computer lab as the school has only four old computers
for the use of students. Moreover, the computer lab will help students of 30 villages
living in and around Udhampur town to connect with digital teaching-learning process along
with other government & private school students.
Pertinently, the computer lab will have 20 - 25 PCs, one UPS for
uninterrupted power supply to meet the lab requirements, one 3-in-1 color-printer and two
3-in-1 black and white printers.
Community Development
100 Wheelchairs and 100 Tricycles to the specially-abled persons
Jammu and Kashmir Bank has always contributed to the development of
local communities in different capacities and varied ways. On these lines, Bank
collaborated with SAKSHAM, a leading national level not-for-profit organization to provide
100 wheelchairs and 100 special tricycles to the specially- abled persons belonging to
various districts of Jammu region and beyond. The initiative is primarily aimed at
contributing Bank's bit towards the welfare and development of specially- abled community
and to ensure their physical, social and psychological rehabilitation.
Upgrading of facilities at Sainik Bhawan Srinagar
Conscious of the sacrifices rendered by the armed forces for the
security of the nation, Bank considers itself duty bound to contribute its bit in
complimenting Government and society's efforts towards looking after the families of the
martyred soldiers. It was towards this end that Bank provided one 1.5 ton Air Conditioner
(Hot and Cold) and one Water Purifier to Sainik Bhawan Srinagar, the organization engaged
in welfare activities carried out for the families of 115 forces Martyrs of the Valley.
Upgrading of facilities at Balgran Jammu
Contributing towards the welfare of lesser privileged children, Bank
collaborated with Balgran, Jammu (a charitable home
for destitute children), which provides boarding/lodging, education,
healthcare, vocational training etc. to orphan and destitute children.
Bank provided 380 sitting chairs to Balgran for upgrading their
furniture-infrastructure as a humble contribution of Bank towards the noble cause of Child
welfare.
Ecology & Environment Plantation drives
As part of enhancing environment sustainability, Bank collaborated with
Border Security Force (BSF) in undertaking a plantation drive at its Subsidiary Training
Center (STC) at Humhama Srinagar that encompasses an area of over 300 acres. The Bank
provided plant stems of apple, almond, walnut, cherry and pear with an aim to improving
green cover in this ecologically sensitive area. The initiative assumes greater importance
as the green cover through plantation will go a long way in protecting not only the campus
residents from the ill effects of pollution but also the people living in the adjoining
areas.
A similar plantation drive was carried out in collaboration with Rahim
Greens Srinagar and pine & apple trees were planted at different educational
institution in Srinagar which included NIT Srinagar, Women's Degree College Zakura, etc
Installation of 15KW Solar Grid at Voluntary Medicare Society's
Srinagar facility
Bank installed a 15KW solar power grid at Voluntary Medicare Society,
Srinagar, a Srinagar based medico-social voluntary organization (registered with Ministry
of Corporate Affairs for mobilizing CSR funds), dedicated to the care, treatment,
education, rehabilitation and empowerment of physically and mentally challenged persons of
all the factions of the society. For over 50 years, VMS is providing its services in all
the districts of J&K and Ladakh UTs. VMS provides institutional and community based
rehabilitation services to the needy persons with disabilities with focus on children and
women. Apart from attending to 85 on-roll and over 300 off-roll specially-abled students
per month, VMS provides medical treatment to almost 2000 patients per month, including
children with special needs, in their Srinagar based facility.
As most of the equipment-oriented services provided at their facility
run on electricity and given the frequent interruptions in the power supply, along with
huge energy cost involved to run these machines and equipment, providing undisturbed
services to the patients and students becomes really difficult. As such, the Bank keeping
in view long-term viability, utility and also sustainability issues into consideration,
installed the solar grid at its Srinagar facility spanned over 46 Kanals of land.
The initiative while ensuring support to the specially-abled people
especially children and women serves the larger purpose of encouraging and promoting clean
and green energy resources.
E-Rickshaws to the University of Ladakh and Kashmir University's South
Campus
Sensitive to the value and importance of protection of environment for
sustenance of the economic and social progress of a country, J&K Bank, notwithstanding
meagre
budget, invested in an environmental friendly endeavor of providing two
e-rickshaws to University of Ladakh (UOL) and one to Kashmir University's South campus
under CSR.
The two campuses are situated in ecologically sensitive areas and
Bank's endeavor aims at encouraging ecofriendly transportation facilities within these
campuses while considerably reducing the pollution levels.
Collaboration with NIT Srinagar for its Green/Clean Campus initiative
under Swachh Bharat Abhiyaan
Situated in vast campus spread over 67 acres of land on the banks of
the world famous Dal Lake, with Nigeen Lake too being in its close vicinity, National
Institute of Technology (NIT) Srinagar is located in a highly ecologically sensitive
environment.
NIT Srinagar is taking concrete steps to become one-of-its- kind green
campuses with a focus on reduction of carbon emissions, encouragement of green energy
initiatives and preservation of ecology and environment. It was with this understanding
that J&K Bank collaborated with NIT Srinagar in its Green & Clean campus
initiatives under Swachh Bharat Abhiyan by providing dust-bins and garden benches to be
placed across their vast campus.
Employment Generation & Skill Development Up-gradation of
infrastructure of Rural Self Employment Training Institutes (RSETIs)
An initiative of Ministry of Rural Development Government of India,
RSETIs act as dedicated institutions designed to ensure necessary skill training and skill
up-gradation of the rural youth especially those belonging to BPL category to mitigate the
problem of unemployment by encouraging and nourishing the culture of entrepreneurship.
J&K Bank, with the support of Central and UT government, runs 12 RSETIs across
J&K, making it a key member of the RSETI network of the nation.
In order to compliment the efforts of RSETIs in imparting quality and
practical trainings to the aspiring entrepreneurs, Bank provided dozens of
plumbing/sanitation kits and electric fitting kits, to these RSETIs. The initiative will
help RSETIs (run by J&K Bank) across J&K to further enhance the level of
practicality/ demonstration in their trainings to ensure better quality and well trained
output.
Promotion of Sports
J&K Bank has a long history of encouraging nationally recognized
sports and in this context promotion and propagation of football assumes special
significance. Apart from having its own football team, Bank is running two football
academies, one each in Jammu and Srinagar. These initiatives have, over the years, helped
scores of youth to polish and nourish their sporting talent and emerge as professional
footballers, with many of them having carved their place in prestigious teams and clubs
across country. Under the instant project, the Bank provided match uniforms, practice
uniforms, tracksuits and footballs to the two academies to meet the immediate needs of the
budding footballers receiving training through these academies.
Corporate Governance
The Bank has established a tradition of exemplary practices in
corporate governance. It encompasses not only regulatory and legal requirements, but also
several voluntary practices, aimed at high level business ethics, effective supervision
and enhancement of stakeholder volume. Several matters have been voluntarily included in
the statement on corporate governance annexed to this report, besides certificate from the
Secretarial Auditors regarding compliance of conditions of Corporate Governance as
stipulated by the SEBI (Listing Obligations & Disclosure Requirement) Regulations,
2015.
Management Discussion and Analysis
The Management Discussion and Analysis Report for the year under report
is presented in a separate section forming part of this report.
Whistle Blower Policy & Vigil Mechanism
The Bank has a Whistle Blower mechanism in place which enhances the
transparency in the organization by encouraging the employees/ directors/ other specified
stakeholders to report any wrongdoing, which comes to their knowledge in the day-to-day
performance of their duties or interaction with other fellow-colleagues/ Bank staff
without fear of retaliation, victimization and unfair-treatment. The Bank has formulated
the "Whistle Blower Policy" to guarantee them protection from any adverse
departmental proceedings. The Policy is compliant to regulatory requirements under Section
177 (9) of the Companies Act 2013, and SEBI Listing Regulations. The policy document is
available on the Bank's official website under link:
https://www.jkbank.com/investor/stockExchangeIntimation/
corporateGovernancepolicies.php
Further, the mechanism adopted by the Bank encourages the Whistle
Blower to report genuine concerns or grievances and also provides for direct access to
Chairman of the Audit Committee of the Board, in exceptional cases.
The grievance under Whistle Blower mechanism can be lodged on the
Bank's official website under link:
https://www.jkbank.com/others/common/wbGrievences.php
It is hereby affirmed that the Bank has not denied any of its personnel
access to the Chairman of the Audit Committee of the Board and that the policy contains
adequate provisions for protecting whistle blowers from unfair termination and other
unfair prejudicial employment practices. In the FY 2022-23, three (03) complaints received
under Whistle Blower Mechanism were placed before the Audit Committee of Board.
Protected Disclosures Scheme
The Bank in line with the RBI prescribed framework, has devised a
Policy Document on the "Protected Disclosure Scheme" The complaints under the
Scheme cover the areas such as corruption, misuse of office, criminal offences, suspected/
actual fraud, failure to comply with existing rules and regulations such as Reserve Bank
of India Act, 1934, Banking Regulation Act 1949, etc. and acts resulting in financial
loss/ operational risk, loss of reputation, etc. detrimental to depositors' interest/
public interest. Reserve
Bank of India (RBI) will be the Nodal Agency to receive complaints
under the Scheme.
The complaint under the scheme should be sent in a closed/ secured
envelope addressed to The Chief General Manager, Reserve Bank of India, Department of
Banking Supervision, Fraud Monitoring Cell, Third Floor, World Trade Centre, Centre 1,
Cuffe Parade, Mumbai 400 005. The envelope should be superscripted "Complaint under
Protected Disclosures Scheme for Banks". Complaints can also be made to RBI through
e-mail: dbspd@rbi.org.in by giving full details as specified above.
The policy document is available on the intranet page of the bank as
well as on the Bank's official website under link https://
www.ikbank.com/pdfs/policy/latest/Policy protected.pdf It is hereby affirmed that No
unfair treatment will be meted out to a Complainant by virtue of his/her having reported a
Disclosure under this Policy. The Bank, as a policy, condemns any kind of discrimination,
harassment, victimization or any other unfair employment practice being adopted against
Complainant(s). Complete protection will, therefore, be given to Complainant(s) against
any unfair practice like retaliation, threat or intimidation of termination/suspension of
service, disciplinary action, transfer, demotion, refusal of promotion, including any
direct or indirect use of authority to obstruct the Complainant's right to continue to
perform his duties/ functions including making further Disclosure under the policy. The
Bank has not received any complaint under the "Protected Disclosure Scheme".
Risk Management
A well-defined, comprehensive risk management framework of our bank is
based on a clear understanding of different risks, accepting various risks, disciplined
risk assessment, measurement & continuous monitoring. The Bank has put in place a Risk
Management and Risk Appetite Framework (RAF) that articulates the risk appetite and drills
down the same into a limit framework for various risk categories. Risk appetite defines
the levels and types of risk that are acceptable, within risk capacity, in order to
achieve strategic obiectives and business plans. The risk appetite framework, which is
approved by the Board, bolsters effective risk management by promoting sound risk-taking
through a structured approach, within agreed boundaries. The key components of the Bank's
Risk Management architecture rely on the risk governance structure, comprehensive
processes and internal control mechanism based on approved policies and guidelines. The
Bank's risk management processes are guided by way of policies adopted appropriately for
various risk categories, independent risk oversight and periodic monitoring by Board of
Directors, Committee of the Board of Directors (Integrated Risk Management Committee of
Board) and Senior Management Committees - Credit Risk Management Committee, Market Risk
Management Committee, Operational Risk Management Committee and Asset Liability Committee
(ALCO). The policies approved from time to time by Board of Directors, Committees of Board
(IRMC) form the basis for governing framework for each type of risk. The Board sets the
overall risk appetite and philosophy for the Bank and have an oversight of all the risks
assumed by the Bank. The Bank's Risk Management framework focuses on the management of key
areas of Risk such as
Credit, Market, Operational Risk and Liquidity Risk and Pillar II
risks; quantification of these risks, wherever possible. The risk management function in
the Bank strives to proactively anticipate vulnerabilities in the business operations
through quantitative or qualitative examination of the embedded risks for effective and
continuous monitoring and control. An independent risk management function ensures that
risk is managed through a risk management architecture as well as through policies and
processes approved by Board of Directors. The risk management policies and procedures
established are updated on continuous basis in compliance to RBI guidelines and
benchmarked to best practices. The Board of Directors with its committee-Integrated Risk
Management Committee (IRMC) reviews risk management policies of the Bank pertaining to
credit, market, liquidity, operational & Pillar II risks that includes strategic risk
and reputational risk, Internal Capital Adequacy Assessment Process (ICAAP) and stress
testing. The senior Management Committees - Credit Risk Management Committee (CRMC),
Operational Risk Management Committee (ORMC) and Market Risk Management Committee (MRMC)
for credit risk, operational risk and market risk operate within the broad risk management
framework of the Bank to assess and minimize these risks. Bank has an independent Risk
Management vertical headed by Chief Risk Officer, who reports to IRMC of Board and
monitors the development and implementation of methodologies for risk identification,
assessment, measurement, monitoring and mitigation for all risks. Information security and
business continuity plan also forms part of risk management functions in the Bank.
Treasury activities are separately monitored by mid office, which reports to Risk
Management Vertical. The Bank has Stress Testing Policy to measure impact of adverse
stress scenarios on the adequacy of capital. The stress scenarios are idiosyncratic,
generic and a combination of both.
Business Responsibility and Sustainability Report (BRSR)
In terms of Regulation 34(2)(f) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, top 1000 Listed Entities based on their market
capitalization as on 31st March every year are required to submit their Business
Responsibility and Sustainability Report (BRSR) on the environmental, social and
governance disclosures as a part of the Annual Report. The Bank's BRSR describing the
initiatives taken by the Bank from an environmental, Social and governance perspective is
enclosed as Annexure- 6.
Information under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Bank does not engage in any form of child labour / forced labour /
involuntary labour and does not adopt any discriminatory employment practices. The Bank
has a Policy against sexual harassment and a Committee "Internal Complaints Committee
for Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace"
has been constituted for dealing with complaints of harassment or discrimination. The said
policy is in line with relevant Act passed by the parliament in 2013. The Bank, through
the policy ensures that all such complaints are resolved within defined timelines. During
the year, one complaint was lodged before the Internal Complaints Committee duly
constituted under the Sexual Harassment of Women at Work Place (Prevention
and Redressal) Act, 2013 and the rules made thereunder. Accordingly,
due inquiry proceedings were conducted in the case, as stipulated in the Act and adequate
opportunity was provided to both complainant and respondent to present/ defend their case.
The same was disposed of within the requisite time frame of 90 days.
Employee accidental deaths
During the year 2023, there were no occurrences of employee accidental
death at the workplace.
Loans, Guarantees & Investment in Securities
Pursuant to section 186(11) of the Companies Act, 2013 loans made,
guarantees given or securities provided or acquisition of shares by a Banking company in
the ordinary course of its business are exempted from disclosure in the Annual Report.
Contracts or Arrangements with Related Parties
Considering the nature of the Industry in which the Bank operates,
transactions with related parties of the Bank are in the ordinary course of business and
are also at arm's length basis. There was no materially significant related party
transaction entered by the Bank with promoters, Directors, Key managerial personnel or
other persons which may have a potential conflict with the interests of the Bank. The
policy on Related Party Transactions and dealing with related parties as approved by the
Audit Committee and the Board of Directors is uploaded on the website of the Bank and the
link for the same is at https://www.jkbank.com/investor/
stockExchangeIntimation/corporateGovernancepolicies.php Statement of related party
transactions under sub section (1) of Section 188 of the Companies Act, 2013 is attached
herewith as Annexure 5.
Information under Insolvency and Bankruptcy Code, 2016
The Bank as on 31st March, 2023 has cases under the IBC resolution, the
details whereof along with existing status is tabulated as under:
(Amt. in Crs)
S .
No. |
No. of
Accounts |
Stage of
Process |
NPA / NPI
Outstanding |
Recoveries
during the year , if any |
1 |
26 |
Resolution
Process (Pending with NCLT) |
1876.60 |
- |
2 |
22 |
Liquidation
Process |
1809.27 |
61.83 |
3 |
3 |
Resolution
approved/ implemented during the year. |
130.62 |
25.66 |
Frauds reported by the Bank
The Bank during the financial year 2022-23 has detected/ reported 20
cases of frauds to Reserve Bank of India involving an amount of Rs. 380.04 Crores.
Frauds reported by Auditors
During the year under review, no fraud was reported by any of the
statutory auditors under Section 143 (12) of the Companies Act, 2013 to the Ministry of
Corporate Affairs, Govt. of India.
Consolidated Financial Statements
Pursuant to Section 129 of the Companies Act, 2013, the Bank has
prepared Consolidated Financial Statements of the Bank, its Subsidiary (JKB Financial
Services Ltd.) and also its Associate (J&K Grameen Bank) which shall be laid before
shareholders at the 85th Annual General Meeting of the Bank along with Bank's Financial
Statements under sub-section (2) of Section 129 i.e. Standalone Financial Statements of
the Bank. Further, pursuant to the provisions of Accounting Standard (AS) 21 -
Consolidated Financial Statements notified under Section 133 of the Companies Act 2013,
read with Rule 7 of the Companies (Accounts) Rules 2014 issued by the Ministry of
Corporate Affairs, the Consolidated Financial Statements of the Bank along with its
Subsidiary/ Associate for the year ended March 31, 2023 form part of this Annual Report.
The statement in form AOC-1 pursuant to first proviso to sub-section (3) of Section 129
read with Rule 5 of Companies (Accounts) Rules 2014 is annexed as Annexure-4.
Statutory Auditors
The Statutory Central and Branch auditors of the Bank are appointed by
the Comptroller & Auditor General of India (C&AG) pursuant to Section 139 (5) of
the Companies Act, 2013. The Bank had three (3) Statutory Central Auditors appointed by
the C&AG of India for the year under report as given below:
1. O Aggarwal & Co, Chartered Accountants
2. Dharam Raj & Co, Chartered Accountants
3. Arora Vohra & co, Chartered Accountants
Statutory Central Auditor's Report
For the FY 2022-23, the Statutory Central Auditors have issued a
qualified opinion with respect to funds raised through ESPS. The Bank's replies to the
observations of the Statutory Central Auditors are furnished as under:
S. No. |
Observations
of the Statutory Central Auditors |
Response
of the Bank |
1. |
Clause 21
of J&K Bank Employee Stock Purchase Scheme, 2023 (JKBESPS 2023) as there was a
restriction that the Eligible Employee under the scheme shall not be entitled to any loan
facility specifically for the purchase of Shares of the Bank under the Scheme. |
The Bank
did not provide any loan facility specifically for the purchase of shares under the
scheme. |
2. |
Para No.
2.3.1.7 of RBI Master Circular- Loans and Advances - Statutory and Other Restrictions
(RBI/ 2015-16/ 95 DBR. No.Dir.BC.10/13.03.00/ 2015-16) dated July 1, 2015 which strictly
prohibited the Banks to extend advances to their employees to purchase their own
bank's shares. |
The Bank
did not extended any loan facility to its employee's for the purpose of purchasing of
shares under the scheme. Further Bank has approached the Reserve Bank of India vide
communication dated June 09, 2023 seeking guidance of RBI regarding applicability of para
No. 2.3.1.7 of RBI Master Circular- Loans and Advances - Statutory and Other Restrictions
(RBI/ 2015-16/ 95 DBR.No.Dir. BC.10/13.03.00/ 2015-16) dated July 1, 2015 to JKB ESPS
2023. |
3. |
Section
39(1) & 42 of the Companies Act, 2013 as the allotment of the shares shall be made
after receipt of funds under the said scheme in a separate Bank Account. However, the
shares have been allotted on 21st March 2023 and payment was realised on 22.03.2023 and
23.03.2023 i.e. before receipt of the entire fund in the ESPS Scheme Account of the Bank. |
Section
39 of the Companies Act, 2013 pertains to the allotment of securities of a company offered
to the public for subscription, while as the ESPS Scheme of the Bank is specifically meant
for its permanent eligible employees only. Therefore, Section 39 of the Act is not
applicable to JKBESPS-2023.
Section 42 (4) of the Companies Act, 2013 provides that every
identified person willing to subscribe to the private placement issue shall apply in the
private placement and application issued to such person along with subscription money paid
either by cheque of demand draft or other banking channel and not by cash.
The process flow for the JKBESPS-2023 was designed in such a manner
that an eligible employee while submitting application for shares should necessarily have
sufficient and required balance in his/her saving account. On successful submission of the
application, the amount proportionate to the shares applied was lien marked. So,
effectively, the amount remained within the Bank's right from the date of submission
of application by the employee, as the lien was in effect.
The mechanism adopted by the Bank is on the pattern of ASBA
(Application Supported by Blocked Amount) prescribed by SEBI vide its Circular no.
CIR/CFD/POLICY CELL/11/2015 dated November 10, 2015, which provides for an alternative
mode of payment in issues, whereby the application money remains in the investor's
account till finalization of basis of allotment in the issue. |
Fees paid to Statutory Auditors
The details of total fees (excluding taxes), for all services, paid by
the Bank on a consolidated basis to the Statutory Central Auditors are tabulated below:
(Amount in Rs. Lakhs)
S.
No. |
Particular |
M/S O
Aggarwal & Co. |
M/S Hem
Sandeep & Co |
M/S Arora
Vohra & Co |
M/S
Dharam Raj & Co |
Total |
1 |
Fee
payment by Bank to Central Statutory Auditors |
71.28 |
12.37 |
73.59 |
72.49 |
229.73 |
2 |
Fee payment
by J & K Grameen Bank (Associate) to Central Statutory Auditors of the Bank |
6.86 |
--- |
|
- |
6.86 |
Comments of C & AG
As on date of this report, the Bank has not received the comments under
Section 143 (6) of the Companies Act, 2013 from The Comptroller and Auditor General of
India on the accounts of the Bank for the year ended 31st March 2023 and the same
alongwith Banks reply to the comments shall be read out at the 85th Annual General
Meeting.
Secretarial Auditors
Pursuant to Section 204 of the Companies Act 2013, your Bank has
appointed CS Ghulam Jeelani Reshi, Proprietor of M/s Reshi & Associates, Company
Secretaries as its Secretarial Auditors to conduct the Secretarial Audit of the Bank for
the FY 2022-23. The Bank provided all assistance and facilities to the Secretarial Auditor
for conducting their audit.
Secretarial Audit Report
The report of Secretarial Auditor for the FY 2022-23 is annexed to this
report as Annexure 3. The Bank's replies to the comments of Secretarial Auditor are
furnished as under:
S. No. |
Observations
of the Secretarial Auditor |
Response
of the Bank |
1. |
The
Composition of the Board was not in compliance to the Section 152 of the Companies Act,
2013 as the Bank did not have adequate number of rotational directors till 25th January,
2023. |
This is a
statement of fact. The Bank is taking steps to augment its Board to make it compliant with
the regulatory prescriptions. |
2. |
The Bank
filed the Form MGT - 14 relating to the raising of capital with Registrar of Companies
with additional fee due to up gradation of MCA Portal from V2 to V3 Portal |
The form
was filed within the permitted window prescribed by MCA. However, due to technical glitch
at MCA portal, receipt with additional fee was generated by MCA portal/ system wrongly. |
Compliance with Secretarial Standards
The Bank is in compliance with all applicable Secretarial Standards as
notified from time to time.
Employee Remuneration
The statement containing particulars of employees as required under
Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in
"Annexure 2" forming part of this report.
Statutory Disclosures
1. The disclosures to be made under sub- section (3) (m) of Section 134
of the Companies Act, 2013 read with rule (8) (3) of the Companies (Accounts) Rules, 2014
by your Bank are explained as under:
A. Conservation of energy
(i) The steps taken or impact on conservation of energy. Bank is
continuously working towards achieving low carbon footprint for which many steps have been
taken including use energy efficient IT equipment Various initiatives taken in this regard
by the bank are given below:
The Bank's Data Center is strategically located in a
high-energy-efficient hosting facility in Noida. The facility adheres to an ITIL- based
service delivery framework, ensuring efficient operations and optimal service levels.
Furthermore, it complies with internationally recognized standards such as ISO 9001 and
ISO 20000, emphasizing the commitment to quality management and IT service management.
This choice of hosting facility not only ensures the security and reliability of the
Bank's data infrastructure but also contributes to energy conservation initiatives through
its efficient design and operational practices.
Bank's Disaster Recovery Center has been shifted to a new
co-location site CtrlS located in Navi Mumbai, which is Asia's Largest Rated
4 Hyper scale Datacenter aligned to TIA- 942 standard having strong
focus on various environmental considerations. The new Facility is USGBC LEED Platinum
Certified Rated4 Datacenter and is World's 1st DC to Win Golden Peacock Eco-Innovation
Award.
The Bank has taken a proactive stance towards environmental
sustainability and energy conservation by implementing an e-Office solution. This
initiative aims to significantly reduce paper consumption, minimize the reliance on
printers, and conserve energy resources. By transitioning to a digital work environment,
the Bank not only improves operational efficiency and streamlines processes but also
demonstrates its commitment to reducing its carbon footprint.
The Bank has increased the usage of Digital Signage Screens as
an energy-efficient alternative to traditional paper-based notices. By adopting this
technology, the Bank significantly reduces the energy consumption associated with
printing, distribution, and disposal of paper notices. The Digital Signage Screens are
designed with energy-saving features, such as low-power LED displays, which contribute to
overall energy conservation efforts.
Energy star compliant computing and communication hardware is
used by the bank across all offices and banking outlets.
The bank ensures the use of Energy Star compliant computing and
communication hardware across all its offices and banking outlets, actively reducing power
consumption and promoting energy conservation.
(ii) The steps taken by the company for utilizing alternate sources of
energy.
Bank operates in a non-energy intensive environment.
However, it is always ensured that energy efficient hardware /
equipment which consumes less power is procured and put in operation. Besides replacement
of CFL Lamps with LED Lamps / fixtures wherever needed stands changed.
(iii) The capital investment on energy conservation equipment.
Bank is steadfast in its commitment to implementing energy conservation
measures throughout the enterprise. This includes the utilization of energy- efficient
equipment such as virtual servers, thin clients, multi-purpose printers, kiosks, and
scanners. By incorporating these technologies, the bank aims to minimize energy
consumption and promote sustainability across its operations.
(iv) Paperless e-Office Initiative.
Bank has successfully adopted paperless e-Office across all departments
at corporate office and is in process of adopting the initiative across enterprise.
(v) USGBC LEED Platinum Certified Rated 4 Datacenter (World's 1st DC to
Win Golden Peacock Eco-Innovation Award).
Bank successfully relocated its Disaster Recovery Center to CtrlS, a
state-of-the-art co-location site in Mumbai. This new site is recognized as Asia's largest
rated LEED Platinum V4 O+M Certified Rated 4 Hyperscale Datacenter, ensuring top-notch
environmental sustainability and operational efficiency. The new Facility is USGBC LEED
Platinum Certified Rated4 Datacenter and is World's 1st DC to Win Golden Peacock
Eco-Innovation Award.
B. Technology Absorption
Our Bank has a strong commitment to simplifying banking experiences for
our customers by focusing on technology driven new business initiatives. These initiatives
are aimed at delivering value through continuous technology adoption and innovation.
Throughout the year, the Bank has implemented number of initiatives leveraging the power
of technology to enhance the overall banking experience for its customers.
Bank has successfully upgraded its core banking system to the newest
version (Finacle 10). This upgrade has introduced new automation capabilities, enabling
the Bank to drive new and innovative business initiatives. Several initiatives have
already been implemented, leveraging the enhanced features, while additional projects are
currently underway to further leverage the system's capabilities and support the Bank's
digital transformation goals.
The bank successfully launched its flagship digital offering,
"J&K Bank Instant Digital Loan," catering to the unique needs of employees
belonging to the J&K Government and other organizations/institutions covered by
existing Memorandums of Understanding (MOUs). This state-of-the-art solution, built on a
robust Straight through Processing (STP) platform, represents a significant upgrade from
the previous "Phone pe Loan" facility. By leveraging advanced automation and
self-
service capabilities, customers can now enjoy a seamless and
hassle-free loan application process. This end-to-end digital solution empowers customers
to apply for loans online, eliminating the need for manual paperwork and reducing
processing time. With a focus on providing the best personal retail lending experience,
the "J&K Bank Instant Digital Loan" ensures convenience, speed, and
transparency throughout the entire loan journey.
Bank has started complete revamp of its customer facing digital
platforms including Mobile Banking, Internet Banking and Kiosk Banking. A Modern and
resilient mobile banking application will be rolled out in this Financial Year which will
be scalable to handle daily transaction load in crores besides being loaded with features
like corporate banking, online loan processing, deposit management, customer digital
engagements etc. The mobile banking UI would be one stop shop for catering to all customer
requirements of banking and wealth management like gold, mutual funds, insurance etc.,
besides acting as customer engagement platform for other services and grievance
management. A cloud based UPI /IMPS solution will also be rolled out this year through
which our bank will be offering interoperable and scalable payment solutions through the
UPI/IMPS ecosystem which will also converge under the new Mobile Banking application.
The bank has also invested in AI/ML Technology and we have rolled out
first version of Chatbot & WhatsApp Banking through Online Personal Assistant
"JIA". The application in its first phase is being used by our valuable
customers to get their financial queries answered, and the bank is in process of adding
more services to the Chabot /WhatsApp banking platform to enrich the customer experience
as per their dynamically changing needs.
Bank has setup a Fintech Initiative and Cloud Adoption Programs, and in
the ensuing financial year it will start with deployment of an Open Banking Platform for
seamless interfacing with partners and customers, and also initiate the Cloud Migration of
selective applications besides deployment of new applications over cloud as part of its
Pilot Cloud Program.
C. Foreign Exchange Earnings and Outgo:
The Foreign Exchange earned in terms of actual inflows during the year
and the Foreign Exchange outgo during the year in terms of actual outflow: During the Year
ended 31.03.2023 the Bank earned Rs.95.98 lacs and spent Rs.182.45 lacs in foreign
currency. This does not include foreign currency cash flow in derivatives and foreign
currency exchange transactions.
2. No significant and material orders were passed by the regulators or
courts or tribunals impacting the going concern status of the Bank's operations in future.
3. Number of cases filed, if any and their disposal under Section 22 of
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013:
Your Bank has Zero tolerance towards any action on the part of any
executive/employee which may fall under the ambit of 'Sexual Harassment' at workplace, and
is fully committed to uphold and maintain the dignity of every women executive/ employee
working in the Bank. Only one complaint of sexual harassment was lodged with the Internal
Complaints Committee during the year 2022-23 and the same was disposed off within the
required time frame of 90 days.
4. No Stock options were issued to the Directors of your Bank
Annual Return
In accordance with the provisions of Companies Act, 2013, the Annual
Return of the Bank for the financial year 2022-23 in the prescribed Form MGT-7 will be
available on the website of the Bank at: https://www.jkbank.com/investor/financials/
annualReturns.php.
Directors Responsibility Statement
Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Board
of Directors hereby state that:
(a) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation relating to material
departures;
(b) the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the company at the end of the
financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the company and for preventing and detecting fraud and
other irregularities;
(d) the directors had prepared the annual accounts on a going concern
basis; and
(e) the directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are adequate and were
operating effectively.
(f) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
Adequacy of Internal Financial Controls related to Financial Statement
The Bank has adequate internal controls and processes in place with
respect to its financial statements which provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements in
accordance with Generally Accepted Accounting Principles. These controls and processes are
driven through various policies, procedures and certifications. The control
environment of the Bank is adequate enough to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of the
Bank's financial statements. The processes and controls are reviewed periodically.
Requirement for maintenance of Cost Records
The cost records as specified by the Central Government under section
148(1) of the Companies Act, 2013 are not required to be maintained by the Bank.
CEO & CFO Certification
Certificate issued by Mr. Baldev Prakash, MD & CEO and Mr. Pratik D
Punjabi, CFO of the Bank, for the financial year under review, was placed before the Board
of Directors at its meeting held on 04th / 5th May, 2023 in terms of the Regulation 17(8)
of the Listing Regulations.
Important events after the closure of Financial Year ended 31-03-2023
This report covers the period of financial year of the Bank beginning
on 1st April, 2022 to 31st March, 2023. However, few material events listed below happened
from 1st April, 2023 till the date of this report.
1. Reserve Bank of India (RBI) has by an order dated June 22, 2023
(received by us on June 23, 2023) imposed a monetary penalty of '2.50 crores on the Bank
for non-compliance with certain directions issued by RBI on 'Creation of a Central
Repository of Large Common Exposures-Across Banks', read with 'Central Repository of
Information on Large Credits (CRILC) - Revision in Reporting', 'Loans and Advances -
Statutory and other Restrictions' and 'Time-bound implementation and strengthening of
SWIFT-related operational controls'. The said penalty has been imposed by the RBI in
exercise of powers vested under the provisions of section 47 A (1) (c) read with section
46 (4) (i) of the Banking Regulation Act, 1949.
2. Dr. Pawan Kotwal, IAS (DIN: 02455728) was appointed as an Additional
Director in the category of Rotational Directors by the Board of Directors of the Bank in
their meeting held on 24th July, 2023.
Transfer of Shares to UT of Ladakh
The J&K Govt. General Administration Department S.O. No. 339 dated
30/10/2020 apportioned the Assets, Liabilities and Posts of the erstwhile State of Jammu
and Kashmir between the Union Territory of Jammu and Kashmir and Union Territory of Ladakh
w.e.f. 31.10.2020. As per the said notification 8.23% shareholding of Jammu & Kashmir
Bank Ltd. consisting of 4,58,29,445 shares which amounts to 13.89% of the shareholding of
the erstwhile state of Jammu and Kashmir as on 31.10.2019 were to be transferred to the UT
of Ladakh and the then remaining 51% of shareholding of erstwhile Jammu and Kashmir state
would remain with the UT of Jammu and Kashmir. The UT of Jammu and Kashmir has completed
the transfer of the said 4,58,29,445 shares to UT of Ladakh on February 10, 2023.
Acknowledgements
The Directors thank the valued customers, shareholders, well- wishers
and correspondents of the bank in India and abroad for their goodwill, patronage and
support. The Directors acknowledge with gratitude the valuable and timely advice, guidance
and support received from Government of India, Government of Jammu & Kashmir, Reserve
Bank of India, Securities and Exchange Board of India (SEBI), Insurance Regulatory
Developmental Authority (IRDA), NABARD, SIDBI, IBA, FIMMDA, FEDAI, Stock Exchanges,
Ministry of Corporate Affairs, Registrar of Companies, Comptroller & Auditor General
of India, Financial Institutions and the Central Statutory Auditors of the bank in the
functioning of the bank.
The Directors place on record their deep appreciation of the valuable
contribution of the members of the staff at all levels for the progress of the bank during
the year and look forward to their continued cooperation in realization of the corporate
goals in the years ahead.
For and on behalf of the Board of Directors
Naba Kishore
Sahoo |
Baldev
Prakash |
Independent
Director |
MD & CEO |
Place:
Srinagar (J&K) |
|
Date:
July 15, 2023 |
|
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