Less than a fortnight after turning the Jammu and Kashmir Bank into a public sector undertaking, Governor Satya Pal Malik Tuesday said that the government will re-examine the accountability of the J&K Bank to State Legislature. According to an official spokesperson, the Governor in a meeting with a delegation of J&K bank employees said all Government owned/controlled companies are accountable to the legislature in some respect, “however, in view of the concerns expressed, and to give comfort to the employees, the government will re-examine the issue of accountability to the legislature.”
He also pointed out the “word PSU has no legal connotation,” adding that the Bank is registered as a government company under the Companies Act and it continues to be a Government Owned Company. “No new changes are being made here,’’ he added.
Governor told the employee delegation that ” Board of the Bank is an appropriate forum for taking and implementing all decisions of the bank’’ and “safeguarding the autonomy and operational independence of the bank is a key objective of the government at all times’’.
However, as a government company, the J&K Bank is a Public Authority under the Right to Information Act (RTI) and hence is automatically subject to transparency provisions of the RTI, he said, adding “transparency is good for the bank in the long term’’.
He assured government support to all initiatives and take necessary steps to make J&K Bank a vibrant institution in view of its being a premier institution of the state and its financial health and future growth is of utmost importance to Jammu and Kashmir.
About the decision turning J&K Bank into a Public Sector Undertaking, Governor pointed out that it is regulated by Reserve Bank of India as an old generation private sector bank, while for the Registrar of Companies, it is a Government Company under the Companies Act and a listed company for SEBI. “It will continue to be regulated by RBI, SEBI and the Registrar of Companies. “No changes are being made here or contemplated,’’ he added.
Last month, the State Administrative Council (SAC) headed by the governor approved a proposal for treating the J&K Bank Limited as a PSU, bringing it under the purview of the Right to Information Act, the Chief Vigilance Commissioner guidelines and the state legislature.
Established in 1938, the J&K bank is the only state government promoted bank in the country, with latter having 59.3 per cent shareholdings in it. As the state is a major shareholder in it, a need was felt that it should have the character of a PSU which is subject to general supervision and access for enhanced transparency in transaction of its business to promote public trust, the government had said, adding that the purpose of the SAC decision is not to question its day to day management, but a step towards strengthening better corporate governance.
However, the Governor’s decision kicked off an autonomy row with many in both Kashmir and Jammu divisions opposing the move. Former chief minister and National Conference leader Omar Abdullah called it a “disturbing development’’, saying Governor being a “caretaker administrator does not have people’s mandate to take such major decisions with far-reaching implications’’. PDP’s Mehbooba Mufti, also a former chief minister, described it “a disturbing step to snatch every bit of autonomy that our institutions have’’.