J&K Bank – Allegations, Ambivalences & Facts!


Jammu & Kashmir Bank is the economic lifeline of the State of Jammu and Kashmir. The bank not only is a boon for businesses but also plays a significant role for employment generation in the trouble-torn State. However, the bank has lately been grabbing eyeballs through news headlines for utterly wrong reasons.


In June this year, the bank Chairman and Managing Director (CMD) Parvez Ahmad was removed from his post after being charged with ‘corruption’.

The action was triggered by a series of protests in Jammu by job aspirants who alleged that the recruitment for Probationary Officer positions was Kashmir-centric after district-wise merit lists were issued by the bank.

A day after he was removed, Anti-Corruption Bureau (ACB) started a probe about Parvez’s “meteoric rise from a chartered accountant” to the bank’s top position in just 15 years.

Pertinently, Parvez (whose three-year tenure was to end in October 2019) was appointed chairman in October 2016, when Mehbooba Mufti was the Chief Minister, with the People’s Democratic Party (PDP) in an alliance with the BJP.


Sources privy to the developments in the bank said that Parvez Ahmed’s removal and subsequent searches in his office were part of an effort by Union Home Ministry to “crackdown on corruption, nepotism, favouritism, and a strike against the back-door non-transparent employment encouraged by him”.

“He had his nephew, Muzaffar, posted to his office immediately after taking over as Chairman. His daughter-in-law, Shazia Ambreen, was appointed a Probationary Officer and is currently heading the Hazratbal branch,” an unnamed official was quoted by The Hindu.

The report also said that the Anti-Corruption Bureau was probing the alleged role of Parvez Ahmad in spending ₹8 crore from corporate social responsibility (CSR) funds on the beautification of the Royal Spring Golf Course in Srinagar, “which is a place of rendezvous for the elite and has no utility for common people”.

He was also accused of facilitating back-door appointments. It has been alleged that workers of political parties were employed in the bank without any job advertisement, written exam or even interview.

Even the State governor Satya Pal Malik in an interview to Times Now in October last year claimed that as many as 582 candidates recruited by the bank, which had kept itself out of the ambit of RTI, were replaced with political appointees. However, the statement was later retracted.

Moreover, he has been targeted for other shortcomings of the bank especially in case of loan processing. Media reports say that loans have been given without due diligence to businesses and politicians, most of which have turned into NPAs. Also, non-performing accounts were given over-draft facilities, reports say.

A statement issued by the State’s Anti-Corruption Bureau claimed that a source report received by the Agency revealed that an insurance deal in violation of norms has been made by J&K Bank with IFFCO TOKIO “in which close relative of former chairman Parvez Ahmad is employed, resulting into undue benefits to the said company.”

However, the sacked Chairman in response said on Twitter that he was “open to scrutiny” on each and every transaction he had done. He said that he had done his job “most diligently, honestly and in the best interest of the institution.”


An FIR No 14/2019 was registered in PS ACB Srinagar by Anti-Corruption Bureau for the insurance deal with IFFCO TOKIO “in violation of the norms.”

The Governor-led State government also announced a host of measures, including splitting the post of Chairman and Managing Director, and bringing the bank under the purview of the Right to Information (RTI) Act and the Central Vigilance Commission (CVC).

The bank’s board of directors recommended splitting the position of Chairman and Managing Director, thereby enabling it to comply with RBI and SEBI guidelines. The board decided that it will implement RTI provisions and the CVC guidelines for the banking sector to bring in accountability and to improve the overall functioning of the bank.


This is not the first time that the J&K Bank’s Chairman has been sacked in the most unexpected manner. Previously, Dr Haseeb Drabu was also removed as Chairman of the Bank in September 2010 by National Conference-Congress coalition government headed by Omar Abdullah as he had been appointed by the previous regime of PDP-Congress Government.

As far as the allegation of District-wise preparation of merit lists for selection of candidates in the Preliminary Exams for the posts of Probationary Officers in the bank is concerned, the official Advertisement Notice (Advertisement No: JKB/Rectt/2018-1579; Dated: 09.10.2018) clearly mentioned the 250 vacancies “as per District-wise requirement”.

Also, the ousted Chairman’s strange decision of uniform cut-off of 40 for PO Prelims across the State was seen as a violation of its already announced selection criteria. Valley based aspirants mocked at JK Bank for conducting preliminary examination which according to them turned out to be useless process after Bank’s decision to announce a uniform cut-off of 40 marks across the State.

Even if all bank examinations are conducted by the national-level recruiting agency Institute of Banking Personnel Selection (IBPS) which takes care of preparing question papers, evaluation and finalizing the merit list, the final selection list is, however, issued by the bank itself.

Last time when it came up with the selection list of REs, only the roll numbers of the selected candidates were made public instead of the entire merit list. Likewise, in the case of BAs, the candidates who were offered jobs got individual appointment letters via mail or post. The list wasn’t made public. The bank has repeatedly, over the years, come under sharp criticism on account of this secrecy.

Unconfirmed reports about the merger of Jammu and Kashmir Bank Limited with some nationalized or private bank have been brushed aside by Reserve Bank of India (RBI). The RBI clarified that there was no such proposal before it and termed the reports about merger “absolutely baseless”.

In fact, Reserve Bank of India’s Prompt Corrective Action, which is a mechanism to maintain sound financial health of the banks, comes into play only when a bank is making losses and recovery seems impossible. J&K Bank is neither a loss-making entity nor hit by structural deficiencies as the bank is being properly regulated. So, there are no strong grounds for any merger of the bank to take place.

The State is under President’s Rule and the ACB was constituted in J&K a few months ago. Sources say that Central government is using the ACB for it wants control of the premier financial institution. This is in the context of NIA’s investigation into the bank’s suspected “dubious activities that may be linked to terror financing.”

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