Jammu and Kashmir Bank defends no-dividend decision amid regional banking shifts

Jammu and Kashmir Bank held its 88th Annual General Meeting, where Managing Director and CEO Amitava Chatterjee defended the decision to withhold dividends despite record profits. The bank cited the prevailing geopolitical situation, upcoming regulatory changes regarding expected credit loss (ECL), and the need to conserve capital for sustainable growth as primary reasons for the decision. The bank reported a return on assets of 1.37 per cent and a return on equity of 18.85 per cent, alongside a capital adequacy ratio of 16.55 per cent.

Separately, banking operations in Jammu and Srinagar were halted on September 23 to observe Maharaja Hari Singh Jayanti. While physical branches of various institutions, including the State Bank of India and Jammu & Kashmir Bank, were closed, digital banking and ATM services remained functional.

Analysis of the region's banking sector reveals a widening credit gap. While total banking business in Jammu and Kashmir reached Rs 3.48 lakh crore, the credit-deposit ratio stands at 61 per cent, significantly lower than the national average. There is a noted structural shift where national banks are concentrating on urban areas, while Jammu and Kashmir Bank maintains a higher proportion of rural branches, leading to a loss in lending market share to competitors.