Expect to log a record profit this time: J&K Bank CEO, MD Baldev Prakash

Jammu and Kashmir Bank (J&K Bank) has scripted a turnaround of sorts. From cutting its NPA by half, to upgrading its 15-year-old “outdated” internal software, a breeze of change is wheezing through it. And, sitting at the helm, its first managing director and chief executive officer (MD & CEO) Baldev Prakash, is quite reasonably a happy man. Prime Minister Narendra Modi too recently praised the turnaround due to government efforts. Subhomoy Bharttacharjee spoke to CEO Prakash to find out what is behind all this

What are the systemic changes brought about in the J&K bank?

We have changed the entire decision making structure of the bank. My appointment (Prakash is from State Bank of India) as an outsider is itself part of those changes. It is the first time the bank has appointed someone to the corner office who is not from J&K. The problem was deeper. From the junior most staff to the top boss, all were earlier appointed only from within the state. Not any longer. We have also institutionalised a system where all decisions are now taken by the board. The committee system within it is now mandatory. So it is now a collective management responsibility within the bank where in future no single person can take a range of decisions. So in this context, it was wonderful to hear from the Prime Minister, good words about the bank.

There were concerns about your asset quality. What is the current status? 

When I took over (in October 2021), the NPA was 9.67 per cent. It has come down to 4 which offers me big satisfaction. It took a lot of effort. This region remained a disturbed area for a long time so recovery actions became slow. This made many of our large customers complacent. Asset quality was worse particularly for the bigger loans since those who could pay money were not being pursued. The message of recovery was not forceful. 
 

What about political issues?

We get no political interference from the UT administration which is a huge help. There was also a change in our approach to the NPA. The teams which used to handle it were not specialised. I created the concept of large credit units where for instance, the posts of relationship manager were created. They were trained and put in these units. Since they will stay in credit for a longer time, our booking quality for credit has improved. 

Going ahead, where will you concentrate?

Our technology was quite outdated. Will you believe we were operating on Finacle 7 which is a 15-year-old platform. We have recently upgraded to the latest platform, Finacle 10. There could have been problems in the makeover and could have gone either way, but luckily we could implement the upgrade of our core banking platform. We can now offer so many options to our customers like online banking solutions like account opening and mobile banking facilities. 

For instance, during any festival like Eid, when there is a rush, our earlier platforms could not take the load. Those episodes are behind us. But I would still say in the digitisation of our process, about 25 per cent still remains. Our CD ratio has improved to 77 per cent, and we expect to log a record profit this time.