Asserting that there is no substantial impact of Kashmir unrest on J&K Bank's business, its Chairman Parvez Ahmed today said loan accounts which have been badly effected by the unrest are beingrestructured.
"There is no serious effect on J&K Bank due to unrest. No substantial impact is on J&K bank. Once the situation revives cash flow will be again in the business, which is down by 30 per cent, will be back", Ahmed said.
"I don't see any concern", Ahmed told reporters here today. There was serious concern raised by trading and industry over the stressed loan accounts due to unrest, he said further.
On stressed loan accounts, he said, "Those loans which were badly effected due to unrest, we are planning to restructure them. Such loan accounts in Kashmir and Jammu would be covered under package subject to approval of the RBI".
After approval from RBI, these loans will have a moratorium after September 30, he said, adding that during this period interest would be funded by J&K Bank.
"They will get sufficient one year period to revive their business", Ahmed said.
Speaking about impact of unrest on the bank's business, he said, "The situation has eased our considerably. 40 per cent of account books are on government employees, whose salaries are routed through J&K Bank and it has no impact of the unrest."
Although there was initial problems in agriculture more so horticulture sector (fruits and harvesting) due to transport issue, he said, adding that now it is available but now the transport has been made available to growers.
"The trade/export of agriculture/horticulture produce, which comprise of 23 per cent of GDP of the state, has doubled than last year", Ahmed said.
The Chairman of J&K Bank further said "during the unrest period, we were consuming the commodities --grocery shops, stores etc were all open during odd hours and they were doing their business".
"We have only 30 per cent stress in loan books. We have managed the situation during militancy and floods as well. There were more serious concerns due to loss of property and human lives. Today, we are in better situation", he said.
Ahmed said, "Today, a disruption to a section of business sector have taken place. We are assessing the losses in this direction".
Replying to another question about warning that there would not be any bottom-line growth in the next 18 months, resulting in "no dividend, no tax provisions and no contribution to the CSR, he said, "The situation is such that it will take longer period of 18 months to consolidate the financial situation."
"If situation improve, we will not take much time to consolidate. It will be done in a year".
"If unrest prolongs it will impact our business. We will need to do provisioning and profitability will be impacted. So we took 18 months period into view", he said.
On issue that Jammu and Kashmir Bank is willing to offer Islamic banking to customers in the state, he said that the issue is under examination.
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