The Jammu and Kashmir state administrative council chaired by Governor Satya Pal Malik has approved a proposal to turn the J&K Bank into a public sector institution, , The Indian Express reported on Saturday. This decision – which was taken on Thursday, a day after Malik dissolved the Assembly – takes away the bank’s autonomy and makes it accountable to the state legislature.
The bank has also been brought under the purview of the Right to Information Act and the guidelines of the Central Vigilance Commission, PTI reported. An unidentified official said the bank’s annual report would be submitted to the state legislature through the finance department, like other public sector banks.
National Conference leader Omar Abdullah called it a “disturbing development” and said the governor was a caretaker administrator who does not “have the people’s mandate to take such major decisions with far-reaching implications”, reported The Indian Express. Peoples Democratic Party leader and former Chief Minister Mehbooba Mufti termed it a “disturbing step to snatch every bit of autonomy that our institutions have”.
People’s Conference leader Sajad Lone, who has the support of the Bharatiya Janata Party, said his party’s economic philosophy was decentralisation and liberalisation. “We believe in smaller government, not more government control,” Lone said. “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.”
The state government holds 59.3% stake in J&K Bank. The bank’s press and information director said the the move was a step towards strengthening corporate governance. “As the state is a major shareholder in J&K Bank Ltd, a need was felt that it 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 trust,” read a statement from the bank.