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Jammu and Kashmir Bank Ltd.

BSE: 532209 Sector: Financials
NSE: J&KBANK ISIN Code: INE168A01041
BSE 00:00 | 28 Sep 36.60 0.40






NSE 00:00 | 28 Sep 36.65 0.50






OPEN 36.55
VOLUME 461678
52-Week high 44.35
52-Week low 14.10
P/E 6.44
Mkt Cap.(Rs cr) 3,414
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Sell Price 0.00
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OPEN 36.55
CLOSE 36.20
VOLUME 461678
52-Week high 44.35
52-Week low 14.10
P/E 6.44
Mkt Cap.(Rs cr) 3,414
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jammu and Kashmir Bank Ltd. (J&KBANK) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting the 82nd Annual Report of yourBank together with the audited Balance Sheet Profit and Loss Account and the report onbusiness and operations for the year ended 31st March 2020.

Performance at a Glance

The aggregate business of the bank stood at Rs. 162187.30 Crore at the end of thefinancial year 2019-20.

The total deposits of the Bank grew by Rs. 8149.33 Crore from Rs. 89638.90 Crore as on31st March 2019 to Rs. 97788.23 Crore as on 31st March 2020recording a YoY growth of 9 percent. CASA deposits of the bank at Rs. 52469.32 Croreconstituted 53.66% of total deposits of the Bank.

Cost of deposits for current FY stood at 4.96 percent.

The net advances of the Bank stood at Rs. 64399.07 Crore as on 31st March2020.

Yield on advances for the current FY stood at 9.48 percent.

The Average Priority Sector advances for the FY 2019-20 stood at Rs. 27157.85 Crore ason 31st March 2020.

The bank effected cumulative cash recovery up-gradation of NPA's of Rs. 2603.51 Croreduring FY 2019-20.

Investment portfolio of the bank stood at Rs. 23052.24 Crore as on 31stMarch 2020.

Insurance Business

The bank earned an income of Rs 45.34 Crore from the Insurance Business. The bankmobilized business of Rs 71.55 Crore and Rs 197.94 Crore during the year in life andnon-life insurance segments respectively.

Income Analysis

The Interest income of the bank stood at Rs. 8446.29 Crore in the year 2019-20.Interest expenses stood at Rs. 4739.62 Crore for FY 2019-20. The Net Interest Income stoodat Rs. 3706.67 Crore for FY 2019-20.

The Net Income from operations [Interest Spread plus Non-interest Income] stood at Rs.4252.59 Crore in the FY 2019-20.

The Operating Expenses registered an increase of Rs. 248.88 Crore during the financialyear 2019-20 and stood at Rs. 2727.54 Crore as compared to Rs. 2478.66 Crore in 2018-19.

The Cost to Income ratio (Operating Expenses to Net Operating Income) stood at 64.14percent for the financial year 2019-20.

Gross Profit

The Gross Profit for the financial year 2019-20 stood at Rs. 1525.05 Crore.


The Provision for Loan Losses Standard Assets Taxation and others aggregated to Rs.2664.46 Crore in the financial year 2019-20.

Net Profit/Loss

The bank registered a Net Loss of Rs. 1139.41 Crore for the financial year 2019-20owing to 148% increase in the Provisions and contingencies.


Keeping in view the loss suffered by the Bank during the year and the Reserve Bank ofIndia's circular dated April 17 2020 directing all banks not to make dividend pay-outspertaining to the financial year ended March 31 2020 until further instructions from theRBI to conserve capital in an environment of heightened uncertainty caused by COVID-19the Board of Directors of the Bank has not proposed any dividend for the year ended March31 2020.

Organisational Changes

The Reserve Bank of India has approved the amendments in the Articles of Association ofthe Bank for separation of the posts of Chairman and Managing Director. In June 2019 theBoard of Directors of your Bank approved implementation of J&K RTI Act 2009 andadoption of Central Vigilance Commission (CVC) guidelines. In furtherance thereof a GroupCompliance Officer has been designated in order to strengthen compliance to variousregulations governance and accountability framework of your Bank thereby enhancingtransparency and efficiency and help in making the institution much stronger andhealthier.

Branch/ATM Network

During the financial year 2019-20 15 new branches were established thereby taking thenumber of branches to 955 (including IARBs)as on 31.03.2020 spread over 17 states and 4union territories. The area-wise breakup of the branch network (excluding extensioncounters/ mobile branches and Service branches) on the basis of census 2011 as at the endof FY 2019-20 is as under:

Area Business Units
(including IARBs)
Metro 175
Urban 110
Semi-Urban 159
Rural 511
Total 955

During the financial year FY19-20 3 EBUs/USBs were established 66 ATMs werecommissioned thereby taking the number of ATMs to 1354 as on 31.03.2020.


As on March 31 2020 the subscribed and paid up capital of your Bank stood at Rs.713450938 comprising of 713450938 equity shares of Re. 1 each. This is subsequent tothe preferential allotment of 156592546 equity shares of Re. 1/- each fully paid up forcash to the Government of Jammu and Kashmir at the issue price of Rs. 31.93 (Rupees ThirtyOne and Ninety Three Paisa Only) per Equity Share (including premium of Rs. 30.93 perEquity Share) aggregating to Rs. 4999999994.00 (Rupees Four Hundred Ninety Nine CroreNinety Nine Lacs Ninety Nine Thousand Nine Hundred Ninety Four Only) to meet the needs ofits growing business including long term capital requirements and to maintain its CapitalAdequacy Ratio as per the regulatory guidelines/ norms laid down by the Reserve Bank ofIndia.

Net Worth and Capital Adequacy Ratio (CRAR)

The Net Worth of the bank stood at Rs. 5397.48 Crore on 31st March 2020after excluding the revaluation reserves. Book Value per Share for the financial year2019-20 stood at Rs. 75.65.

Capital Adequacy Ratio under Basel III stood at 11.40 percent as on March 2020. Thetier I component of CRAR is 9.88 percent as on 31st March 2020.

Board of Directors

Your Bank has Nine (9) Directors consisting of two (2) promoter Directors 8Non-Executive Directors as on 31st March 2020.

Non Independent Executive Directors

Mr. R. K. Chhibber Non Independent Executive Director has served as Interim Chairman& MD of the Bank from June 10 2019 to October 09 2019 and has been serving as theChairman & MD of the Bank under section 10BB of the Banking Regulation Act 1949 sinceOctober 10 2019.

Mr. Parvez Ahmed Non Independent Executive Director served as the Chairman & CEOof the Bank from October 06 2016 to June 08 2019.

Non Independent Non-Executive Directors

Dr. Arun Kumar Mehta IAS Financial Commissioner to Govt. of J&K FinanceDepartment Mr. Bipul Pathak IAS Principal Secretary to Lt. Governor Govt. of J&KMr. Anil Kumar Misra (RBI Nominee) Mr. Vikram Gujral and Mr. Sonam Wangchuk are the NonIndependent Non-Executive Directors of the Bank.

Independent Non-Executive Directors

In terms of the definition of ‘Independent Director' as prescribed underRegulation 16(b) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 and Section 149(6) of the Companies Act 2013 and based on thedeclarations/disclosures received from the Directors the following Non–ExecutiveDirectors are Independent Directors:-

1. Dr. Rajeev Lochan Bishnoi

2. Ms. Monica Dhawan

3. Mr. Naba Kishore Sahoo

All Independent Directors of the Bank have given their respective declarations statingthat they meet the criteria of Independence as laid down under the applicable laws and inthe opinion of the Board the independent directors meet the said criteria.

Appointments/Resignations from the Board of Directors

During the year under review;

Mr. Azhar ul Amin (DIN: 07265913) resigned from Directorship of the Bank on April 232019.

Mr. R. K. Chhibber (DIN: 08190084) was appointed as Interim Chairman & MD from June10 2019 to October 09 2019 and as Chairman & MD of the Bank under section 10BB ofthe Banking Regulation Act 1949 from October 10 2019.

Mr. Parvez Ahmad ceased to be Director and subsequently Chairman and CEO of the Bankwith effect from June 08 2019.

Mr. Anil Kumar Misra (DIN:08066460) (RBI Nominee) was appointed as an additionaldirector by Reserve Bank of India for a period of two years on July 03 2019.

Dr. Pronab Sen (DIN: 07831725) ceased to be the Director on the Board of the Bank witheffect from September 26 2019 after completion of his term.

Mr. Mohammad Ashraf Mir (DIN: 07586792) Dr. Sanjiv Agarwal (DIN: 00110392) Mr. SunilChandiramani (DIN: 00524035) and Mr. Rahul Bansal (DIN: 01216833) ceased to be theDirectors of the Bank with effect from September 26 2019 as they were not re-appointed atthe 81st Annual General Meeting of the Bank.

Mr. Vikram Gujral (DIN: 03637222) and Mr. Sonam Wangchuk (DIN: 07662456) werere-appointed / appointed as Directors on the Board of the Bank at the 81stAnnual General Meeting of the Bank held on September 26 2019.

Mr. Dhaman Kumar Pandoh (DIN: 01332068) resigned from Directorship of the Bank onOctober 07 2019.

Mr. Umang Narula IAS (DIN: 03536402) was appointed as Government Nominee Director onthe Board of the Bank with effect from October 09 2019.

Mr. Bipul Pathak IAS (DIN: 08077260) was appointed as Government Nominee Director onthe Board of the Bank in place of Mr. Umang Narula IAS with effect from November 112019.

Dr. Rajeev Lochan Bishnoi (DIN: 00130335) and Ms. Monica Dhawan (DIN: 01963007) wereappointed as Independent Directors on the Board of the Bank on January 11 2020. Mr. NabaKishore Sahoo (DIN: 07654279) was appointed as Independent Director on the Board of theBank with effect from March 01 2020.

Board of Directors places on record their deep appreciation for the valuable servicesrendered by the ex-directors during their tenure as Directors of the Bank.

Directors seeking appointment/re-appointment at AGM

Mr. Vikram Gujral (DIN:03637222) who is retiring by rotation has offered himself forre-appointment. The profile and necessary details of the mentioned Director have beenincluded in the Corporate Governance Report.

Appointments/Resignations of the Key Managerial Personnel

Mr. R. K. Chhibber Chairman & Managing Director Ms. Rajni Saraf Chief FinancialOfficer and Mr. Mohammad Shafi Mir Company Secretary are the Key Managerial Personnel ofthe Bank.

Mr. R. K. Chhibber was appointed as Interim Chairman & MD of the Bank from June 102019 to October 09 2019 and has been serving as the Chairman & MD of the Bank undersection 10BB of the Banking Regulation Act 1949 with effect from October 10 2019

Mr. Parvez Ahmed ceased to be the Chairman and CEO of the Bank with effect from June08 2019.

Ms. Rajni Saraf was appointed as Chief Financial Officer of the Bank with effect fromJuly 05 2019 in place of Mr. Rakesh Gandotra who ceased to be Chief Financial Officer ofthe Bank with effect from June 30 2019 after attaining the age of superannuation.

None of the Key Managerial Personnel has resigned during the year under review.

Number of Meetings of the Board

During the year under review Ten (10) Board Meetings were held in due compliance withstatutory provisions on the following dates:

15.05.2019 08.06.2019 15.06.2019 03.08.2019 25.09.2019 23.10.2019 30.12.201911.01.2020 31.01.2020 07.02.2020

Committees of the Board

The Bank has following committees of the Board:

Management Committee

Audit Committee

Special Committee of Board on Frauds

Stakeholders Relationship Committee

Information Technology Strategy Committee

Corporate Social Responsibility Committee

Integrated Risk Management Committee

Customer Service Committee

Nomination and Remuneration Committee

Legal and Impaired Assets Resolution Committee

Human Resource Development Committee

Investment Committee

GST Steering Committee

The compositions powers roles terms of reference etc. of aforesaid committees aregiven in detail in the statement on Corporate Governance annexed to this report.

Performance Evaluation of the Board

The Nomination and Remuneration Committee (NRC) has approved a framework / policy forevaluation of the Board Committees of the Board and the individual Members of the Board(including the Chairperson). In conformity with the said policy requirements following isthe process of evaluation:

The performance evaluation of all the independent directors is conducted by the entireBoard excluding the Director being evaluated.

Independent Directors evaluates the performance of non – independent directorsChairperson and Board as a whole and submits its report to the Board alongwith necessarycomments and suggestive course of action arising out of the evaluation.

The performance evaluation of the Committees of the Board is conducted by the entireBoard.

A questionnaire for the evaluation of the Board its Committees and the individualMembers of the Board (including the Chairperson) designed in accordance with the saidframework and covering various aspects of the performance relating to the following isforwarded to individual Directors:

Board : Board composition & quality board meetings & procedures Board development strategy & Risk management Board & Management relations succession planning and stakeholder value & responsibility etc.
Committees of : the Board Functions & duties management relations committee meetings & procedures etc.
Chairman of the : Board Managing Relationships Leadership Role & Responsibility etc.
Individual : Directors Participation in meetings managing relationships knowledge & skills & personal attributes etc.

The responses received to the questionnaires on evaluation of the Board itsCommittees individual Directors and Chairman are consolidated and discussed by the Board.

Your Bank has in place a process wherein declarations are obtained from the Directorsregarding fulfillment of the ‘fit and proper' criteria in accordance with RBIguidelines. The declarations from the Directors other than members of the NRC are placedbefore the NRC and the declarations of the members of the NRC are placed before the Board.Assessment on whether the Directors fulfill the said criteria is made by the NRC/Board onan annual basis.

Subsidiary Company

As on March 31 2020 your Bank has one unlisted wholly owned subsidiary JKB FinancialServices Limited (JKBFSL). JKB Financial Services Ltd. was set up in the year 2008 tocarry on the activities of Stock Broking Depository Services Distribution of MutualFunds Distribution of Credit Cards and collection of Utility Bills. The Company took overthe depository business of NSDL/CDSL from J&K Bank and started operations as afull-fledged Broker of NSE/BSE with effect from March 01 2013. The Company planted itsroots in first instance in depository and broking services and is currently offering StockBroking services in NSE/BSE cash segment and NSE F&O. The company has embarked on anaggressive journey of profitable growth through a collaborative model customer outreachstate of the art technology application platforms diversified product portfolio andcustomer awareness and advisory services. The JKBFSL network spans over Jammu Kashmir andGurugram and the company strives to be the premier provider of financial planning andinvestment management products and services in J&K and Ladakh besides having presencein other major centres of the country.

Performance and Financial Position of JKBFSL

The operating income of the Company for the year ended 31st March 2020stands at `4.39 Crores. Other income of the company stood at `43.48 lacs. The total incomeof the Company for the year ended 31st March 2020 stood at `4.82 Crores. Thecompany posted a net loss of `1.52 crores for the financial year ended 31stMarch 2020 however during the fourth quarter of the financial year 2019-20 the companyposted a net profit of `0.18 crores. Salient features of the financial statement of JKBFSLare placed as Annexure 5 to this report.

Regional Rural Bank Sponsored by J&K Bank: J&K Grameen Bank (Associate)

The J&K Grameen Bank has come into existence on 30th June 2009 with the issuance ofstatutory notification by GoI MoF Department of Financial Services under sub-section (1)of section 23 (A) of the Regional Rural Banks Act 1976 vide F. No. 1/4/2006-RRB providingfor amalgamation of Kamraz Rural Bank and Jammu Rural Bank into a single new RegionalRural Bank under the name of J & K Grameen Bank with its Head Office at Jammu and hascommenced business effective from 01.07.2009. Presently bank is operating in 13 districtsof the UTs of J&K and Ladakh viz. Baramulla Bandipora Kupwara Jammu KathuaRajouri Poonch Leh Kargil Samba Kishtwar Ganderbal and Srinagar having 217 brancheswith 1051 employees.

Capital Structure:

In terms of the RRBs Act 1976 the authorized capital of Regional Rural Banks was fixedat Rs.5.00 Crore (which stands amended to Rs. Two Thousand Crore in terms of the RegionalRural Banks (Amendment) Act 2015 notified in the Gazette of India on 12-05-2015). Theissued and paid up capital of the J&K Grameen Bank is Rs.97.16 Crore fully subscribedby the Central Government State/UT Government and Sponsor Bank in the ratio of 50:15:35respectively. The details are tabulated hereunder:

1. Authorized Share Capital Rs.2000 Crore
2. Subscribed / Paid up Share Rs.97.16 Crore
Central Government (50%) Rs.48.58 Crore
State/UT Government (15%) Rs.14.57 Crore
Sponsor Bank (35%) Rs.34.01 Crore

Tier II perpetual bonds:

For implementation of 100% CBS in JKGB J&K Bank has contributed an amount of Rs.11.67 crores in the shape of perpetual bonds being 50% cost for implementation of CoreBanking Solution in J&K Grameen Bank.

Performance of J&K Grameen Bank as on 31.03.2020


The total business of the bank as on 31st March 2020 stood at Rs. 6310.13Crore against Rs. 5716.91 Crore as on 31st March 2019 thereby showing anincrease of Rs. 593.22 Crore registering a growth of 10.38% during the financial year2019-20.


The deposits of the bank have increased from Rs. 3823.72 Crore to Rs. 4106.91 Croreduring the financial year 2019-20 thereby registering a growth rate of 7.41%.


Gross advances of the Bank as on 31st March 2020 stood at Rs. 2203.22 Croreas against Rs. 1893.19 Crore as on the corresponding date of the previous year recording agrowth of 16.38%

CD Ratio:

The C.D. Ratio of the bank has increased by 4.14% from 49.51% as on 31stMarch 2019 to 53.65% as on March 31 2020.

NPA Management:

JKGB has made recoveries/ up gradations for an amount of

` 115.34 Crore in the NPAs during the FY 2019-20 with fresh slippages to the tune of `136.78 Crore. The Gross NPAs of the bank as on March 31 2020 at 9.11% (` 200.75 Crore) ofthe gross advances has decreased from 9.47% (` 179.31 Crore) as on March 31 2019.Similarly Net NPAs of the bank as on March 31 2020 at 4.57% (Rs. 95.83 Crore) hasdecreased from 4.99% (Rs. 90.05 Crore) as on March 31 2019.

Detailed NPA position as on March 31 2020 is given hereunder: (Amount in Crore)

NPA at the beginning of FY 179.31
Slippage 136.78
TOTAL (1+2) 316.09
Recovery/ up gradation 115.34
NPA at the end (3-4) 200.75
%age to gross advances 9.11%
Provisions 104.92
Net NPA at the end 95.83
%age to net advances 4.57%
NPA Coverage % 52.26

Priority Sector Advances:

The priority sector advances outstanding as on 31st March 2020 stood at Rs. 1737.44Crore against Rs. 1458.94 Crore outstanding as on 31st March 2019 registeringa growth of 19.09% (Rs.278.50 Crore) on YoY basis. RRB specific benchmark of 75% portionof priority sector advances to total advances outstanding has been well maintained with78.86% advances portfolio comprising of Priority Sector loans.

NPA Position:

The gross NPA level of the Bank as on 31.03.2020 is at Rs. 200.75 Crore i.e. 9.11% ofthe gross advances. The Net NPAs as on 31.03.2020 stood at Rs.95.83 Crore which accountsfor 4.57% of net advances.

Business per Employee:

The business per employee as on 31st March 2020 stood at Rs. 6.00 Croreagainst Rs. 5.61 Crore as on corresponding date of the previous year.

Business per Branch:

The business per branch as on 31st March 2020 stood as Rs. 29.08 Croreagainst Rs. 26.35 Crore as on corresponding date of the previous year recording a growthof 10.36%.


Against Net Profit of Rs. 8.06 Crore recorded at the end of the previous FY 2018-19the bank has recorded Net loss of Rs. 119.34 Crore as on 31st March 2020 mainlybecause of provisioning of Rs. 172.83 Crores as per the NABARD guidelines being 40% ofpension liability.

Lead Bank Responsibility

J&K Bank is the only Private Sector Bank in the country assigned withresponsibility of convening State/UT Level Bankers' Committee (SLBC/UTLBC) meetings. TheBank continued to discharge its lead bank responsibility satisfactorily in 12 districts ofUT of J&K i.e. Srinagar Ganderbal Budgam Baramulla Bandipora Kupwara AnantnagKulgam Pulwama Shopian Poonch and Rajouri. Lead bank responsibility in the other 8districts i.e. Jammu Samba Kathua Udhampur Reasi Doda Ramban and Kishtwar isassigned with State Bank of India.

The Annual Credit Plan for J&K for FY 2019-20 was launched in time and itsimplementation was monitored in the J&K SLBC/UTLBC meetings. During FY 2019-20 banksoperating in J&K disbursed credit of Rs. 28164.79 Crore in favour of 1025447beneficiaries against target of Rs. 35771.55 Crore for 1232611 beneficiariesregistering an achievement of 79% in financial terms and 83% in physical terms. Thisincludes Priority Sector credit of Rs. 15624.91 Crore and Non-Priority Sector credit ofRs. 12539.88 Crore.

Out of total Priority Sector credit of Rs. 15624.91 Crore disbursed by all banks inthe UT of J&K during the FY 2019-20 J&K Bank alone has disbursed Rs. 10 072.52Crore against the target of Rs. 15156.63 Crore thereby achieving 66.46% of its annualtarget which accounts for 64.46% of the total credit disbursed to priority sector by allbanks in the UT.

During the FY 2019-20 following meetings were conducted:

Due to non-availability of Government functionaries only two meetings of State/UT LevelBankers' Committee (SLBC/UTLBC) were conducted by the Lead Bank during FY 2019-20 i.e.110th meeting of J&K SLBC held on 29th August 2019 andconsequent to re-organization of erstwhile J&K State into two UTs of J&K andLadakh first J&K UT Level Banker's Committee meeting (UTLBC) was held on 28thJanuary 2020.

A Special Meeting of J&K SLBC to address difficulties faced by the borrowers andbanks due to disruption in business in J&K since August 2019 was held on 10thSeptember 2019.

One meeting of the Steering Sub-Committee of J&K UTLBC to monitor IT-enabledFinancial Inclusion FLCs & Credit Plus activities in J&K under the Chairmanshipof Regional Director Reserve Bank of India R.O. Jammu was conducted on 3rdDecember 2019.

One meeting of the Steering Sub-Committee of J&K UTLBC to monitor SHG-Bank LinkageProgramme in J&K under the Chairmanship of Chief General Manager NABARD R.O. Jammuwas conducted on 28th Feb. 2020.

A meeting of the Sub-Committee of Empowered Committee on MSMEs {Erstwhile Sub-Committeeof State-Level Inter-Institutional Committee (SLIIC)} to discuss rehabilitation of sickMSMEs units in J&K State was held on 25th October 2019.

Lead Bank ensured that the district-level and block-level meetings such as DCC/ DLRC/BLBC and other relative meetings under Lead Bank Scheme were held in all the 20 districtsof UT of J&K during the FY 2019-20 as per schedule.

Implementation of Financial Inclusion Plans (FIPs):

After successful implementation of FIP-I and FIP-II under the directions from ReserveBank of India a roadmap for opening "brick & mortar" branches orCBS-enabled Banking Outlets in the identified 104 villages having population over 5000 inJ&K is presently under implementation. These villages have been allocated to 8 majorscheduled commercial banks operating in J&K (viz. J&K Bank -48 SBI-15 PNB-11HDFC Bank-10 ICICI Bank-06 Canara Bank-5 UCO Bank-5 and CBI-4). As of 31.03.2020 53villages have been covered for banking services with opening of 10 brick & mortarbranches and 43 CBS-enabled banking outlets out of which 28 have been covered by J&KBank 13 by SBI 8 villages by PNB 2 villages by UCO Bank and 1 village each covered byICICI Bank and Canara Bank. Out of the remaining 51 villages India Post Payments Bank(IPPB) is having its outlets in 21 villages and these are as such deemed to be coveredby IPPB leaving 30 villages yet to be covered. Progress is being monitored in quarterlymeeting of UTLBC J&K/ Steering Sub-Committee meetings.

Responsibility of setting up of RSETIs in UT of J&K:

In terms of guidelines issued by Ministry of Rural Development Government of Indiasetting up the Rural Self Employment Training Institutes (RSETIs) in all the districts ofJ&K was assigned by J&K UTLBC to two banks viz. J&K Bank and SBI as per theirLead Bank responsibility. Accordingly J&K Bank has set up 12 RSETIs in its allocated12 lead districts (Srinagar Ganderbal Budgam Baramulla Bandipora Kupwara AnantnagKulgam Pulwama Shopian Poonch and Rajouri). State Bank of India has set up 8 RSETIs inits allocated 8 lead districts of Jammu Samba Kathua Udhampur Reasi Doda RambanKishtwar. Performance of RSETIs in conducting training programmes and the number ofpersons benefited through credit linkage is being reviewed in all quarterly UTLBCmeetings.

Responsibility of setting up of FLCs in UT of J&K:

In terms of RBI guidelines for setting up of Financial Literacy Centres (FLCs) in allthe districts of Jammu and Kashmir J&K Bank has made 12 FLCs operational in its 12allocated lead districts (viz. Srinagar Ganderbal Budgam Baramulla Bandipora KupwaraAnantnag Kulgam Pulwama Shopian Poonch and Rajouri) and SBI having made 8 FLCsoperational in its 8 allocated lead districts of UT of J&K (viz. Jammu SambaKathua Udhampur Reasi Doda Ramban Kishtwar). In addition PNB JKGB EDB and J&KState Cooperative Bank have also established 6 2 2 & 1 FLCs respectively in variousdistricts of J&K which as on 31.3.2020 takes the total number of FLCs in UT ofJ&K to 31. The performance of FLCs in conducting the Financial Literacy Camps as perthe guidelines from RBI is being reviewed at various forums including quarterly UTLBCmeetings.

100% Saturation Drive for KCC Crop

In terms of instructions from Government of India a Special Saturation Drive for 100%coverage of farmers under the KCC Scheme was launched in UT of J&K in the month ofFebruary 2020. During the said special drive 438987 fresh KCCs were issued by banks inUT of J&K taking the total number of KCCs as on 31.07.2020 to 880200.

Brand Building

In the world of banking and finance it is primarily the brand perception thatinstantly manifests the health of an organization within the public imagination besidesthe numbers displayed in its balance sheet. Thus being proactive in our brand promotionthrough advertising and publicity we have successfully improved our brand exposure duringthe FY 2019-20 to increase the brand recall thereby enhancing our brand perception andincreasing our brand value.

The bond of trust with all our stakeholders was further strengthened and cemented byleveraging all the means and channels of communications available for uninterruptedmessaging throughout the financial year. Besides the bank's products services andfacilities were successfully advertised and publicized through all the available channelsof dissemination across the operational geography of the bank. Also the marketingcampaigns initiated by the bank to enhance the overall business while meeting the settargets were duly publicized with proper follow-up communications.

Moreover the functioning and accomplishments of the bank were effectively communicatedto the relevant target audiences including the major stakeholders along with thecustomers shareowners other stakeholders and general public through customized andefficiently packaged messages/ hand-outs using print and multi-media outlets within theUnion Territory and relevant channels across the country. Increasing our presence in thesocial-media universe we further strengthened and streamlined our online presence toreach out to the larger audiences and enhance the bank's brand image by optimallyleveraging the highly popular mediums of social connectivity platforms especiallyFacebook Twitter Instagram and YouTube.

Corporate Social Responsibility (CSR) Policy

As a responsible corporate citizen J&K Bank envisions to integrate its strategicintent and business goals with the needs of the society in order to achieve an inclusivesustainable and harmonious ecosystem. This represents the core principle and forms thebasis of the bank's CSR policy.

The Corporate Social Responsibility (CSR) policy of the bank envisages not only aninclusive and sustainable socioeconomic empowerment of the underprivileged it strives tohelp achieve a vibrant and environmentally conscious ecosystem. The CSR policy isavailable on the website of the bank

During the Financial Year (FY) 2019-20 the bank continued to intervene and enhancevalue creation in the society through CSR activities in consonance with its mission of‘Serving to Empower'. The statutory disclosures with respect to the CSR committee anda report on the CSR activities forms part of this report at Annexure 1.

Corporate Governance

The Bank has established a tradition of exemplary practices in corporate governance. Itencompasses not only regulatory and legal requirements but also several voluntarypractices aimed at high level business ethics effective supervision and enhancement ofstakeholder volume. Several matters have been voluntary included in the statement oncorporate governance annexed to this report besides certificate from the CentralStatutory Auditors regarding compliance of conditions of Corporate Governance asstipulated by the SEBI (Listing Obligations & Disclosure Requirement) Regulations2015.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review is presented ina separate section forming part of this report.

Whistle Blower Policy & Vigil Mechanism

The Bank has implemented a "Whistle Blower Policy" pursuant to which whistleblowers can raise concerns relating to reportable matters (as defined in the policy) suchas breach of J&K Bank Code of Conduct fraud bribery corruption employeemisconduct illegality health & safety environmental issues and wastage/misappropriation of bank funds/ assets etc. Further the mechanism adopted by the Bankencourages the Whistle Blower to report genuine concerns or grievances and also providesfor direct access to Chairman of the Audit Committee of the Board in exceptional cases.

The policy is available on the website of the Bank at the link

It is hereby affirmed that the Bank has not denied any of its personnel access to theChairman of the Audit Committee of the Board and that the policy contains adequateprovisions for protecting whistle blowers from unfair termination and other unfairprejudicial and employment practices. However no case was referred to the Audit Committeeof the Bank during the year.

Risk Management

A well-defined comprehensive risk management framework of our bank is based onaccepting various risks controlled risk assessment measurement and monitoring of theserisks. The key components of the Bank's Risk Management architecture rely on the riskgovernance structure comprehensive processes and internal control mechanism based onapproved policies and guidelines. The Bank's risk management processes are guided by wayof policies adopted appropriately for various risk categories independent risk oversightand periodic monitoring by Board of Directors the sub-committees of the Board ofDirectors Senior Management Committees – Credit Risk Management Committee MarketRisk Management Committee Operational Risk Management Committee & Asset LiabilityCommittee (ALCO).

These policies approved from time to time by Board of Directors Committees of Boardform the basis for governing framework for each type of risk. The Board sets the overallrisk appetite and philosophy for the Bank and have an oversight on all the risks assumedby the Bank. The Bank's Risk Management frwork focuses on the management of key areas ofRisk such as Credit Market Operational Risk and Liquidity Risk and Pillar II risks;quantification of these risks wherever possible. The risk management function in the Bankstrives to proactively anticipate vulnerabilities in the business operations throughquantitative or qualitative examination of the embedded risks for effective and continuousmonitoring and control. An independent risk management function ensures that risk ismanaged through a risk management architecture as well as through policies and processesapproved by Board of Directors. The risk management policies and procedures establishedare updated on continuous basis in compliance to RBI guidelines and benchmarked to bestpractices. The Board of Directors with its sub-committee Integrated Risk ManagementCommittee (IRMC) reviews risk management policies of the Bank pertaining to creditmarket liquidity operational & Pillar II risks that includes strategic risk andreputational risk Internal Capital Adequacy Assessment Process (ICAAP) and stresstesting.

Risk management is administered by Executive/ Senior management committees & ChiefRisk Officer (CRO) through Integrated Risk Management Department (IRMD). IRMD hasstructured management committees; Credit Risk Management Committee (CRMC) OperationalRisk Management Committee (ORMC) and Market Risk Management Committee (MRMC) for creditrisk operational risk and market risk that operate within the broad risk managementframework of the Bank to assess and minimize these risks.

Information security and business continuity plan also forms part of risk managementfunctions in the Bank. Treasury activities are separately monitored by mid office whichreports to IRMD. The Bank has Stress Testing Policy to measure impact of adverse stressscenarios on the adequacy of capital. The stress scenarios are idiosyncratic generic anda combination of both.

Business Responsibility Report

In terms of Regulation 34(2)(f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 top 1000 Listed Entities based on their marketcapitalization as on 31st March every year are required to submit theirBusiness Responsibility Report(BRR) as a part of the Annual Report. The Bank's BusinessResponsibility Report describing the initiatives taken by the Bank from an environmentalSocial and governance perspective is enclosed as Annexure- 7.

Information under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Bank does not engage in any form of child labour/ forced labour/involuntary labourand does not adopt any discriminatory employment practices. The Bank has a policy againstsexual harassment and an "Internal Complaints Committee for Prevention Prohibitionand Redressal of Sexual Harassment of Women at Workplace" for dealing with complaintsof harassment or discrimination. The said policy is in line with relevant Act passed bythe parliament in 2013. The Bank through the policy ensures that all such complaints areresolved within defined timelines. During the year no complaint was lodged before thecommittee and no case is pending for disposal.

Loans Guarantees & Investment in Securities

Pursuant to section 186(11) of the Companies Act 2013 the provisions of section 186of the Companies Act 2013 except sub-section (1) do not apply to loans made guaranteesgiven or security provided by a Banking company in the ordinary course of business.Theparticulars of investments made by the bank are disclosed in Schedule 8 of the FinancialStatements as per the applicable provisions of the Banking Regulation Act 1949.

Contracts or Arrangements with Related Parties

Considering the nature of the Industry in which the Bank operates transactions withrelated parties of the Bank are in the ordinary course of business and are also at arm'slength basis. There was no materially significant related party transaction entered by theBank with promoters Directors Key managerial personnel or other persons which may have apotential conflict with the interests of the Bank. The policy on Related PartyTransactions and dealing with related parties as approved by the Audit Committee and theBoard of Directors is uploaded on the website of the Bank and the link for the same is( policy.php). Statement of related party transactionsunder sub section (1) of section 188 of the Companies Act 2013 is attached herewith asAnnexure 6.

Information under Insolvency and Bankruptcy Code 2019

The Bank as on 31st March 2020 has cases under the IBC resolution thedetails whereof along with existing status is tabulated as under:

(Amt. in Crs)

No. of Ac- counts Stage of Process Resolution process(Pending NPA / NPI outstanding R e c o v- e r i e s d u r i n g the year if any
1 35 with NCLT) Liquidation 2812.98 Nil
2 10 Process Resolution approved/ 1094.32 0.65
3 1 implemented during the year 45.78 4.03

Frauds reported by the Bank

The Bank during the financial year 2019-20 has detected/ reported 23 cases of fraud toReserve Bank of India involving an amount of Rs. 221.14 Crore.

Frauds reported by Auditors

During the year under review one fraud was reported by one of the Joint statutoryauditors under section 143 (12) of the Companies Act 2013 to the Ministry of CorporateAffairs Govt. of India.

Consolidated Financial Statements

Pursuant to Section 129 of the Companies Act 2013 the Bank has prepared ConsolidatedFinancial Statements of the Bank its Subsidiary (JKB Financial Services Ltd.)and also itsAssociate (J&K Grameen Bank) which shall be laid before shareholders at the ensuing 82ndAnnual General Meeting of the Bank alongwith Bank's Financial Statements under sub-section(20) of Section 129 i.e. Standalone Financial Statements of the Bank. Further pursuant tothe provisions of Accounting Standard (AS) 21 - Consolidated Financial Statements notifiedunder section 133 of the Companies Act 2013 read together with Rule 7 of the Companies(Accounts) Rules 2014 issued by the Ministry of Corporate Affairs the ConsolidatedFinancial Statements of the Bank along with its subsidiary/Associate for the year endedMarch 31 2020 form part of this Annual Report.

Statutory Auditors

The Central Statutory and Branch auditors of the Bank are appointed by the Comptroller& Auditor General of India (C&AG) pursuant to Section 139(5) of the Companies Act2013. The Bank had four (4) Joint Statutory Auditors appointed by the C&AG of Indiafor the year under review as under:

1. O.P Garg & Co Chartered Accountants Jammu

2. P.C Bindal & Co Chartered Accountants Srinagar 3. K.K Goel & AssociatesChartered Accountants Jammu

4. Verma Associates Chartered Accountants Srinagar

Fees paid to Statutory Auditors

The details of total fees for all services paid by the Bank on a consolidated basisto the Statutory Central Auditors are tabulated below:

Particulars Amount (In Lakhs)
M/S Verma Associates M/S K K Goel & Associates M/S P C Bindal & Co M/S O P Garg & Co Total
1 Fee payment by Bank to Central Statutory Auditors Rs. 76.41 Rs. 78.19 Rs. 76.51 Rs. 76.09 Rs.307.20
2 Fee payment by J & K Grameen Bank (Associate) to Central Statutory Auditors of the Bank Rs.21.08 Rs.21.08

Comments of C & AG

Comments under Section 143 (6) of The Companies Act 2013 on the accounts of the Jammuand Kashmir Bank Ltd. for the year ended 31st March 2020 were not received uptothe date of this report and accordingly coud not be incorporated in the report. Thecomments if any along with the reply of the Bank will be read out at the meeting itself.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act 2013 your Bank has appointed M/s DSMR& Associates Practicing

Company Secretaries Hyderabad as its Secretarial Auditors to conduct the SecretarialAudit of the Bank for the FY 2019-20. The Bank provided all assistance and facilities tothe Secretarial Auditor for conducting their audit.

Secretarial Audit Report

The report of Secretarial Auditor for the FY 2019-20 is annexed to this report asAnnexure 2. The Bank's replies to the comments of Secretarial Auditor arefurnished asunder:

Observations of Secretarial Auditor Response by the Bank
• The vacancy caused by the resignation of Mrs. Vijayalakshmi Iyer was filled up on 11th January 2020 consequent to appointment Mrs. Monica Dhawan as Independent Woman Director beyond the time limit prescribed under the Regulation 17 (1)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
• The vacancy caused by non-reappointment of Independent directors namely Mr. Pronab Sen Mr. Sanjiv Agarwal Mr. Sunil Chandiramani and Mr. Mohammad Ashraf Mir by the members in the Annual General Meeting held on 26th September 2019 was filled by the Bank by appointing Dr. Rajeev Lochan Bishnoi Mrs. Monica Dhawan and Mr. Naba Kishore Sahoo as Independent Directors with effect from 11th January 2020 and 1st March 2020 respectively. During the year under review due to unprecedented and extraordinary reasons beyond its control the Bank has involuntarily become non-compliant with certain regulations of the Listing Regulations/Companies Act 2013 relating to Composition of Board of Directors inability to reconstitute the statutory committees of the Board within the stipulated period and convening of meetings thereof. Consequent upon the appointment of Independent Directors the composition of the Board and Committees thereof were re-aligned to the Regulatory requirements. Subsequently the meetings of the Board and Committees thereof were held as per the regulatory requirements.
The aforesaid appointments were made beyond the time limits prescribed under Section 149 of the Act read with the rules made there under and Regulation 25(6) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
• Pursuant to Section 177 and 178 of the Companies Act 2013 read with Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 17(2) and 18(2((a) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 the composition of the Audit Committee Nomination and Remuneration Committee and Stakeholders Relationship Committee was not in compliance for the period beginning from 26th September 2019 and 10th January 2020 since the Bank did not have any Independent Directors.
• The Bank has conducted Board Meetings held on 23rd October 2019 and 30th December 2019 without the presence of at least one Independent Director. The gap between the meetings of the Audit committee held on 2nd August 2019 and 30th January 2020 is 180 days which is beyond the time limit specified in the Secretarial Standards.
• Article 69(i) of the Articles of Association prescribes that the Bank shall have minimum Seven (7) directors on the Board. However during the period from 7th October 2019 to 11th January 2020 the Bank had only six directors on its Board.

Compliance with Secretarial Standards

The Bank is in compliance with all applicable Secretarial Standards as notified fromtime to time except to the extent stated in the secretarial audit report.

Employee Remuneration

The statement containing particulars of employees as required under section 197(12) ofthe Companies Act 2013 read with rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is given in "Annexure 3"forming part of this report.

Statutory Disclosures

1. The disclosures to be made under sub- section (3)(m) of Section 134 of the CompaniesAct 2013 read with rule (8)

(3) of the Companies (Accounts) Rules 2014 by your Bank are explained as under:

A. Conservation of energy:

i. The steps taken or impact on conservation of energy:

Your Bank's technology infrastructure works in an energy efficient manner with anobjective to keep the carbon footprint at a very low level. Various IT initiatives havebeen initiated in this regard by your bank which are given below:

Usage of corporate email has been maximized across bank to ensure digital communicationis increased.

Internal communication in the forms of circulars guidelines newsletters policies andprocedures is done through a dedicated Intranet site.

Bank's Data Center is hosted at a high energy efficient hosting facility in Noida whichoperate on the ITIL based service delivery framework and follow ISO 9001 and ISO 20000standards.

Energy star compliant computing and communication hardware is used by the bank acrossall offices and banking outlets.

ii. The steps taken by the company for utilizing alternate sources of energy:

Your bank operates in a non-energy intensive environment. However it is always ensuredthat energy efficient hardware / equipment which consumes less power is procured and putin operation. Besides replacement of CFL Lamps with LED Lamps / fixtures wherever neededstands changed.

iii. The capital investment on energy conservation equipment:

Your bank has made sizable investment on energy conservation equipment's likeProcurement of servers desktops Printers Scanners Routers & Switches.

B. Technology Absorption :

Investment in advance technology platforms and continuous innovation to deliver variousproduct offerings and services to customers has always been an endeavor and importantconstituent of your Bank's business strategy. Various new features such as utilitypayments including integration with PHE PDD and through single platforms like BBPS hasbeen introduced for customer convenience and ease. The Bank is on a journey towardscompete digitization and associated work flow of documents created by all business unitsand offices using Document Management System platform.

The Bank has started migration process of moving to an advanced version of Core BankingSolution (Finacle 10) that will enhance the functionality richness and provide featuresthat will enable your bank to innovate more products and service offerings with addedbenefits like increasing operational agility interoperability and productivity.

C. Foreign Exchange Earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflow:

During the year ended 31st March 2020 the Bank earned Rs. 240.23 lacs andspent Rs. 182.63 lacs in foreign currency. This does not include Foreign Currency CashFlow in derivatives and Foreign Currency Exchange Transaction.

2. No significant and material orders were passed by the regulators or courts ortribunals impacting the going concern status of the Bank's operations in future.

3. Number of cases filed if any and their disposal under Section 22 of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013:

Your Bank has Zero tolerance towards any action on the part of any executive/employeewhich may fall under the ambit of ‘Sexual Harassment' at workplace and is fullycommitted to uphold and maintain the dignity of every women executive/employee working inthe Bank. No such case was reported during the period under report.

4. No Stock options were issued to the Directors of your Bank

Extracts of Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2020 forms part of thisreport as Annexure 4.

Directors Responsibility Statement

Pursuant to Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 theBoard of Directors hereby state that:-

i. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

ii. We have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Bank as on 31st March 2020 and of the profitand loss of the Bank for the year ended on that date;

iii. We have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Bank and preventing and detecting fraud and otherirregularities;

iv. We have prepared the annual accounts on a going concern basis;

v. We have laid down internal financial controls to be followed by the Bank and ensurethat such internal financial controls were adequate and operating effectively;

vi. We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Adequacy of Internal Financial Controls related to Financial Statement

The Bank has adequate internal controls and processes in place with respect to itsfinancial statements which provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements. These controls andprocesses are driven through various policies procedures and certifications. Theprocesses and controls are reviewed periodically. The Bank has a mechanism of testing thecontrols at regular intervals for their design and operating effectiveness to ascertainthe reliability and authenticity of financial information.

Requirement for maintenance of cost Records

The cost records as specified by the Central Government under section 148(1) of theCompanies Act 2013 are not required to be maintained by the Bank.

CEO & CFO Certification

Certificate issued by Mr. R. K. Chhibber Chairman & MD and Mrs. Rajni Saraf CFOof the Bank for the financial year under review was placed before the Board of Directorsat its meeting held on 29thJune 2020 in terms of Regulation 17(8) of theListing Regulations.

Important events after the closure of Financial Year ended 31.03.2020

This report covers the period of financial year beginning on 1st April 2019to 31st March 2020. There were no material events from 1st April2020 to 29th June 2020 - the date when the annual accounts were adopted by theBoard of Directors of the Bank. For the impact of COVID-19 on the performance of the Bankrefer "note no. 25.1 of schedule 18 - Notes on standalone/consolidated accounts ofthe Bank.

The Bank subsequent to the receipt of RBI approval for separation of the position ofChairman & CEO into a Chairman of the Board and a Managing Director & CEO of theBank has appointed Mr. R. K. Chhibber as Chairman of the Board and Mr. Zubair Iqbal asManaging Director & CEO of the Bank subject to the approval of RBI. The Bank hasapplied to RBI for approval of aforesaid appointments under section 35B of BankingRegulations Act 1949 which are under the consideration of Reserve Bank of India.


The Directors thank the valued customers shareholders well-wishers and correspondentsof the bank in India and abroad for their goodwill patronage and support. The Directorsacknowledge with gratitude the valuable and timely advice guidance and support receivedfrom Government of India Government of Jammu & Kashmir Reserve Bank of IndiaSecurities and Exchange Board of India (SEBI) Insurance Regulatory DevelopmentalAuthority (IRDA) NABARD SIDBI IBA FIMMDA FEDAI Stock Exchanges Ministry ofCorporate Affairs Registrar of Companies Comptroller & Auditor General of IndiaFinancial Institutions and the Central Statutory Auditors of the bank in the functioningof the bank. The Directors place on record their deep appreciation of the valuablecontribution of the members of the staff at all levels for the progress of the bank duringthe year and look forward to their continued cooperation in realization of the corporategoals in the years ahead.

For and on behalf of the Board of Directors