Record tourism growth to boost banking: J&K Bank CEO

Around 1.27 crore tourists, including Amarnath and Mata Vaishno Devi shrine pilgrims, visited J&K in 2022, setting a new record. J&K expects this figure to cross 2.25 crore this year

August 25, 2023 05:28 am | Updated 05:28 am IST - SRINAGAR

Decorated Mata Vaishno Devi Bhavan ahead of Navratri festival, at Katra in Reasi district.

Decorated Mata Vaishno Devi Bhavan ahead of Navratri festival, at Katra in Reasi district. | Photo Credit: PTI

Growing tourist footfall and bullish horticulture in J&K will boost banking prospects this year, J&K Bank Managing Director and Chief Executive Officer (CEO) Baldev Prakash said on Thursday in Srinagar.

“Tourism is impacting all sectors, including the handicraft and hospitality services sector. We expect around two crore tourists this year. The money will start flowing and both deposits and advances should see growth,” Mr. Prakash told The Hindu.  

Record tourism

Around 1.27 crore tourists, including pilgrims to Amarnath and Mata Vaishno Devi shrine, visited J&K in 2022, setting a new record. J&K expects this figure to cross 2.25 crore this year.  

Mr. Prakash said the horticulture sector is bullish, with apple crop ready and high-density variety picking up.

He said the impact of tourism on the local economy could be gauged from the fact that borrowers in Kashmir, whose accounts had gone bad, repaid their loans last year. “Many sought additional loans. The recovery of smaller loans is showing an upward trend. More loans were extended last year and it’s only increasing,” Mr. Prakash said.

The J&K Bank, of late, has hardened its stand against Non-Performing Assets (NPAs) and is strictly implementing the SARFAESI Act, which allows auction of property belonging to defaulting borrowers.

NPAs reduced

“The bank’s NPA was hovering around 9% at one stage. We have reduced it to 6.04%. Net NPA witnessed a sharp decline to 1.62% in the previous financial year,” Mr. Prakash said.

Mr. Prakash said the implementation of the SARFAESI Act was not “as good prior to 2019”. “It could be because of law and order issues. There was some hesitancy from the bank. However, the Act is being implemented now.”

Without naming anybody, Mr. Prakash said there were borrowers who diverted funds. “ A few borrowers, who have the ability to repay loans, did not. They diverted money, taken for ‘X’ and utilized it for ‘Y’. That is where the problem is. We ask them to repay public money,” he added.

Mr. Prakash, who addressed the 85th Annual General Meeting of the bank in Srinagar, said deposits of J&K Bank grew by 6.39% YoY to ₹1.22 lakh crore. The current Account Savings Account ratio of the Bank remains strong at 54.10%. Gross Advances of the Bank grew by 16.89% YoY at par with the banking industry from ₹70 thousand crore to ₹82 thousand crore,” he said.

He said the bank made an unprecedented annual profit of ₹1197 crore, the highest since inception 85 years ago, in the previous financial year.

The bank has recommended a dividend of ₹0.50 per equity share of Re.1/- each fully paid for the financial year ended March 31, 2023. “This decision reflects our commitment to sustainable growth and maximizing shareholder value,” Mr. Prakash said.

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