J&K Bank re-opens 115 of its 300 flood-affected branches

Says customer data, records, cash are safe

Jammu and Kashmir Bank (J&K Bank) has re-opened 115 of its more than 300 flood-affected branches in the state of Jammu & Kashmir, its Chairman and Chief Executive Officer Mushtaq Ahmad said on Friday. The bank plans to operationalise more branches in the next few days but expects normalcy to return only after issues pertaining to electricity and connectivity are restored.

“Once the situation improves, we will be able to assess the extent of losses. This has been a huge calamity and it will take some time for us to return to normalcy. But we want to assure all our stakeholders that our data, customer records and cash are safe,” Ahmad told Business Standard.

The lender has 683 branches in the state, of its total of 818 branches. The flood has affected more than 300 of the bank’s branches. “We have facilities in Srinagar, Gurgaon, Noida and Mumbai. Whenever there is a calamity like this we shift our operations to one of the safer facilities. Hence, we have been able to protect all our data and records,” Ahmad said.

He, however, admitted that due to the flood the bank’s borrowers in the state may find it difficult to repay their loans on time. “People have suffered losses. So, naturally there will be some pressure (on their ability to repay).But we expect some special dispensation package will be offered since it is a natural calamity,” Ahmad said.

As perthe Reserve Bank of India's (RBI) guidelines lenders are allowed to restructureloans of borrowers affected by natural calamities as their ability to repay getseverely impaired.

In all cases of restructuring, RBI has suggested that atleast one year of moratorium period should be considered by banks. Also,lenders have been asked not to insist for additional collateral security forsuch restructured loans.

"Assetclassification for (such) restructured loans will remain the same as prevalentat the time of restructuring for a period of one year as per extant guidelinesfor restructured loans," RBI said in its master circular detailing theguidelines for relief measures by banks in areas affected by natural calamitieson July 1, 2014.