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New Delhi: At a meeting of the State Administrative Council (SAC), the body has decided to take away the autonomy of the Jammu and Kashmir Bank and treat it as a Public Sector Undertaking (PSU). The bank will now be brought under the purview of the Right to Information (RTI) Act, the Chief Vigilance Commissioner (CVC) guidelines and the State Legislature. Until now, the bank was classified as an "old private sector bank," was supervised by the Reserve Bank of India (RBI) and was also subject to oversight by the Comptroller and Auditor General (CAG).
The council meeting, chaired by J&K Governor Satya Pal Malik, said that the Annual Report of the bank shall be placed before the State Legislature through the State Finance Department. The J&K Bank Ltd shall be accountable to the State Legislature like other state PSUs, Malik said.
The decision, however, has elicited attacks from the Opposition, who claim that the decision will impact the functioning of the bank in far-reaching ways and bring in interference from the government. Terming it a "disturbing development," National Conference's Omar Abdullah said the Governor, who is a "caretaker administrator did not have the people's mandate to take such major decisions with far-reaching implications."
Omar Abdullah said the Governor, who is a "caretaker administrator did not have the people's mandate to take such major decisions with far-reaching implications."
PDP chief and former CM Mehbooba Mufti described it as a "disturbing step to snatch every bit of autonomy that our institutions have." Sajad Lone of People's Conference said his party's economic philosophy is decentralisation and total liberalisation. "We believe in smaller government, not more government control. The best thing the government of the day can do is to get out of the way. Any remedies (regarding J&K Bank) should have been institution-specific, rather than invading it with overarching government control. The track record of J&K government PSUs is extremely bad," he said.
Established in 1938, the J&K Bank Ltd is the only state government promoted bank in the country, with the Jammu and Kashmir government currently holding 59.3 percent of the shares.
Being the major shareholder, the government felt that the bank should have a character of a PSU which is subject to general supervision and access for enhanced transparency in the transaction of its business to promote public trust.
