Private Banks Cash In As Kashmir Booms

Private Banks Cash In As Kashmir Booms

1 January 2013
Mail Today
Naseer Ganai

Srinagar: When the armed insurgency erupted in the Valley in 1990, almost all financial institutions and banks shut shop and fled Kashmir. But, with the security situation better and militancy ebbing, banks, many from the private sector, are back with a bang. Among the new banks, it is the HDFC Bank that has taken the lead in opening branches in the state, especially in the Valley. HDFC bank started its operations in J&K in 2005 with a branch at Residency Road in Srinagar. It had only five customers. The bank now has more than 1,200 employees and it recently opened its 54th branch. 'We are opening branches in towns, rural areas and in far off places like Kargil. We have given a choice to customers. People are embracing our bank because of our service quality,' vice president of the HDFC Bank Iftikhar Ahmad said. Yes Bank, which opened its first branch 2004, has five branches. It plans to open more in the Valley in the coming months. ICICI Bank, which came to Kashmir in 2005, is also opening new branches across the Valley. 'Banks are like grocery shops. If you provide good service to the people they will come to you. There is a huge untapped market in the state,' an official of a public sector bank said. He said that once new banks open at every corner of the state their credit deposit ratio will improve. 'The credit deposit ratio is 37 per cent and we will improve it and bring it on a par with the RBI guidelines,' Ahmad said. He added that the HDFC bank was giving apple loans and kisan credit loans in the priority sector. 'We are here to stay. Despite a five month long strike in 2010 and agitation of 2008, we didn't move out. We are committed,' he said. The state's leading bank, the Jammu and Kashmir Bank, is game for the competition from new players and is going to open 60 new branches in the future. Unlike other banks, J&K Bank didn't close any of its branches. 'It speaks of our commitment and we didn't leave the people,' executive president of J&K Bank Tafazul Hussain said. Senior officials of the J&K Bank said it is a myth that separatists and other political parties appealed to the people to shift their deposits to the bank, which helped it to grow. 'Nothing like that happened. We were the only bank which provided services to the people. The bank grew not only in J&K but throughout the country,' they said. Hussain is not worried about the in-roads by private sector banks. 'It gives people choice. They can go anywhere. But ultimately they will realise that J&K Bank has no replacement in terms of service, advances and social corporate responsibility,' he said. Nationalised banks, which are facing severe criticism for their low credit-deposit ratio, are also bracing for the competition. State Bank of India, which has 62 branches in the Kashmir valley, is to open six branches in the Valley soon. Shakeel Qalandar, former chairman of the Federation of Commerce and Industries Kashmir (FCIK) and a member of the Prime Minister's task force committee on economic reconstruction in J&K, said banks open branches only if they know there is a market. 'These banks might be satisfied about the market. That is why they are coming. Let us see whether they help the state's economy by lending in priority sectors,' he said. Prof. Nisar Ali, a former member of the state finance commission, said the Reserve Bank of India in its previous report described Jammu and Kashmir as an unbanked area. 'Deposits in J&K State are high, which prompts banks to move in. The RBI is also helping them. These banks will generate some economic activity in unbanked areas of the state as supply creates its own demand,' he said.