Governor Satya Pal Malik on Tuesday assured that the government would re-examine a decision that made the Jammu and Kashmir Bank accountable to the state legislature, even as he remarked that the word PSU has “no legal connotations”. He also said that safeguarding the autonomy and operational independence of the bank was “always a key objective of the government”.
In its November 22 meeting, the governor-led state administrative council (SAC) approved a proposal for treating the bank as a Public Sector Undertaking (PSU), apart from making provisions of the Right to Information Act applicable to the institution, like other PSUs. Besides, the SAC had also decided that the bank shall follow the CVC guidelines.
“The J&K bank shall be accountable to the state legislature like other state PSUs. The annual report of the bank shall be placed before the state legislature through the state finance department which will issue appropriate directions in respect of these to the bank for observance,” an official communication had said.
The SAC had justified the decision to declare bank a PSU, saying since the State was a major shareholder in the institution and “thus 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 transaction of its business to promote public trust”.
In Tuesday’s meeting with the bank employees, the Governor said as far as the PSU matter was concerned, the bank was regulated by the RBI as an old generation private sector bank; by the registrar of companies as it was a government company under Companies Act, and by the SEBI as it was a listed company.
“It will continue to be regulated by the RBI, SEBI and the registrar of companies. No changes are being made here or contemplated,” the Governor said in an official statement.
J&K bank, he said, was registered as a government company under the Companies Act.
“The word PSU has no legal connotation. J&K bank continues to be a government-owned company. No new changes are being made here,” the governor’s statement read.
Since November 22, various political parties, bank employees, trade unions and associations and business organisations have been demanding rollback of the SAC decisions related to the functioning of the J&K Bank, arguing that these were “aimed at snatching the financial autonomy of the institution.”Talking on November 24, former finance minister Haseeb Drabu had termed the decision as an “unqualified disaster”.
“It (the decision) is thoughtless and regressive and it will have a very negative impact on the prime institution of the state and its functioning,” Drabu had said.
Two ex-chairmen of the bank, MY Khan and Mushtaq Ahmad, had also opposed the decision and sought its roll back.
‘WILL RE-EXAMINE ISSUE OF ACCOUNTABILITY BY LEGISLATURE’
In Tuesday meeting, the Governor also said that all government owned/controlled companies, including the J&K Bank, which is registered as a government company, were accountable to the legislature in some respect.
“This is what has been stated in the SAC decision (of November 22). This does not add any new element. However, in view of the concerns expressed, and to give comfort to employees, the government will re-examine the issue of accountability to the legislature,” the governor’s statement said, adding that the board of the bank was an appropriate forum for taking and implementing all decisions of J&K bank.
“Safeguarding the autonomy and operational independence of the bank is key objective of the government at all times,” he said in the statement.
Regarding the decision on RTI applicability, the Governor said as a government company J&K bank was a ‘public authority’ under RTI and hence was “automatically” subject to the transparency provisions of the Act.
“Nothing new is being imposed in this regard. Transparency is good for the bank in the long term.”The Governor’s statement termed the bank a premier institution of the state and its “financial health and future growth is of utmost importance to Jammu & Kashmir”.
“Therefore, the government would support all initiatives and take necessary steps to make the J&K Bank a vibrant institution,” said the statement, assuring that the employees should not be concerned about their employment, future prospects or salary structure under any circumstances.
The Board of the bank, the statement said, was competent to take decisions in this regard and the powers vest in the board.“No changes are being contemplated on this front,” the statement read.