The shareholders of Jammu and Kashmir (J&K) Bank have rejected a proposal to reappoint four directors, with over 85 per cent members voting against the plan.
Sunil Chandiramani, Sanjiv Agarwal and Mohammad Ashraf Mir were up for reappointment for two years, from June 17, 2019 to June 16, 2021. Also, Rahul Bansal was due to be reappointed, the bank said in a filing with the BSE after its annual general meeting, which was held on September 26 at the lender’s corporate headquarters in Srinagar.
The bank did not elaborate on the reason for the rejection.
Sonam Wangchuk, co-founder of the Students Educational and Cultural Movement of Ladakh, and Vikram Gujral have been reappointed as directors.
The shareholders also approved a proposal to raise capital of Rs 550 crore through tier-I bonds and Rs 1,050 crore through Basel III-compliant bonds.
Addressing the shareholders earlier, R K Chhibber, the bank’s interim chairman and managing director, said despite testing times, J&K Bank has been able to maintain consistency in growth rate and earnings, and estimates were have by and large
Despite downgrading a few large loan accounts, including Infrastructure Leasing & Financial Services (IL&FS), “your bank has registered a net profit of Rs 464.88 crore. With a comfortable ratio of low cost deposits — Current Account and Savings Account (CASA) at 50.7 per cent, the net interest margin was 3.84 per cent. The provisions coverage ratio for non-performing assets (NPAs) stood at 64.30 per cent, net NPA of 4.89 per cent” during FY19, Chhibber said.
The road ahead for banking industry in the current financial year (FY20) looks less bumpy than in the previous year. FY20 is expected to be a pivotal year in accelerating the difficult-yet-imperative transformation of the banking industry.
Spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. The pipeline of potential NPAs has shrunk by now and settlement of older NPAs has reached the stage of enforcement.
During FY20, earnings are expected to pick up, led by expanding margins, moderate credit costs and stability in fee income and treasury book. The bank’s focus on retail business and the micro, small and medium enterprises sector is expected to improve the earnings further, the lender said. This will improve the margins and meet the additional provision requirements.