Peaceful Kashmir Triggers A New Race In Private Banks

Peaceful Kashmir Triggers A New Race In Private Banks

22 January 2013
The Economic Times
Masood Hussain

Srinagar: A peaceful Kashmir has thrown up so much of opportunities that private banks are in a race to maximize their branch network in the state. HDFC bank, the oldest private bank, has a 54 branch network in the state and access to over Rs 1000 crore low cost deposits. 'By the end of this fiscal, we are adding six more branches to the network of which five will be in Kashmir and one in Rajouri,' Zubair Iqbal, circle head and VP said. 'We have presence almost every where with two branches in Ladakh and 30 in Kashmir and 22 in Jammu.' It also operates 150 ATMs across the state. 'Right now we are serving 122 thousand account holders with cumulative deposits of Rs 1006 crore,' Zubair said. 'Our credit off take is Rs 371 crore and it includes lot of money that has gone into priority sector after we opened peripheral branches.' Retaining aggressive growth - adding 40 branches in single year, might help the bank push itself up the ranks ahead of the nationalized banks. If clearing volumes is any indication then HDFC is playing second fiddle to the J&K Bank, state's banking behemoth. 'We do not have access to government funds, state money is with the J&K Bank and the central government manages its devolutions and businesses through State Bank of India and Punjab National Bank,' Zubair said. 'If we get even part of it, we will help in overall improvement of the sector.' HDFC bank is the only financial institution that offers gold loans and the monopoly in this sector is fetching it a good business. 'Right now we have our vaults full of gold as the loan outstanding on this account is Rs 51.94 crore,' Zubair said. 'By an average we offer five crore rupees of gold loans a month.' The improving market has encouraged other private banks to think towards Kashmir. Axis Bank and ICICI Bank which are currently operating one branch each in Srinagar, are thinking of opening 10 and 11 branches, respectively. They have already applied for the licences. 'It is getting good,' Mushtaq Ahmad, Chairman of the banking leader J&K Bank Mushtaq Ahmad said. 'The new banks will obviously trigger a positive competition and that will the market.' J&K Bank has two-third share in the overall deposits as well as advances. By the end of September 2012, sources in the banking sector said J&K is being serviced by 1536 branches with cumulative deposits of Rs 58086 crore and advances of Rs 21217 crore. J&K Bank solely runs 521 branches with Rs 35907 crore deposits and Rs 14314 crore advances making it the single biggest bank of the state that dictates how the economy grows.