The Jammu and Kashmir government on Saturday removed J&K Bank chairman Parvez Ahmad and appointed RK Chibber the interim chairman, PTI reported.
Soon after the decision was announced, the state vigilance department searched the bank’s headquarters in Srinagar, reports said.
“Parvez Ahmad, Chairman cum Managing Director, shall cease to be Director on the Board of Directors of the Bank and consequently be no longer the Chairman cum Managing Director of the board,” Additional Secretary, Finance, Vishal Sharma said in an order. It further added that Chhiber had been appointed as the interim chairman and as a director on the board of directors.
The order that has been addressed to the company secretary of the J&K Bank says that it is effective immediately, IANS reported. The Jammu and Kashmir government holds 59% shares of the bank. It is also the only private sector bank that is designated as the Reserve Bank of India’s agent for banking business and conducts the same services for the Centre apart from collecting central taxes for Central Board of Direct Taxes.
Ahmad, who was removed five months before the end of his term, was appointed by the Peoples Democratic Party and the Bharatiya Janata Party combine in October 2016, The Economic Times reported. Chhiber who has earlier served as the Grameen Bank chairman and was also one of the executive presidents of the J&K Bank, is the first non-Kashmiri chairman to be appointed to the post.
In November 2018, the bank and J&K Governor Satyapal Malik publicly tussled as the latter tried to turn the bank into a public sector institution. Malik also accused the bank of appointing employees according to political recommendations.
However, the decision was overturned following mass protests of the bank’s employees who feared the institution could be co-opted into a larger public sector enterprise that could compromise its autonomy.
Malik finally clarified that the J&K Bank would continue to be regulated by the RBI.
The J&K Bank was incorporated on 1938 and is listed on the Nifty and Sensex. The bank’s total business as on the closing date of March 31 was 1,61,864 crore, The Economic Times reported. The bank posted a net profit of Rs 214.80 crore for the fourth quarter of 2018-19, but the asset quality continued to be in stress.
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