J&K Bank’s top brass goes into huddle as bad loans increase

Tribune News Service

Jammu, February 22

Since the Rs 11,400-crore scam of Nirav Modi involving Punjab National Bank (PNB) has come to the fore, the J&K Bank management has gone into a huddle to rectify the mistakes which have led to the accumulation of huge non-performing assets (NPAs).

According to sources, the gross NPA of J&K Bank at present could be over Rs 6,000 crore while the net NPA is over Rs 2,000 crore.

Gross NPA means the overall NPA with the bank, including NPA against which the bank has taken guarantee from companies who have taken loan. Net NPA means the bank hasn’t got any kind of security and the chances of return of the loan are minimal. Ever since the PNB scam has come to the fore, people in J&K have developed a sense of disbelief that more such businessmen might be involved in similar scams and their money could go waste if the NPA of J&K Bank increases. J&K Bank is the state’s own bank and salaries of all state government employees are drawn from it. A couple of days ago, it came to the fore that Nirav Modi’s uncle Mehul Choksi had take a loan of Rs 152 crore from J&K Bank and had not returned it.

Sources said the loan was not given directly by J&K Bank to Choksi but a Central bank had sought money from various banks to provide loan to Choksi who had applied for a loan with that bank.

“J&K Bank also gave Rs 152 crore and it has already been declared NPA,” said a source.

During the recently concluded Budget session of the legislature, National Conference MLA from Sonawari Mohammad Akbar Lone had released the names of a few top ministers and politicians who had taken loan from J&K Bank and were to be declared NPAs. Insiders in J&K Bank said the NPA of the bank had also increased because some businessmen had taken loan on the name of shell companies and that loan had also become NPA.