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HomeIndiaGovernancePSU status for J&K bank has no legal connotations: Governor Satya Pal...

PSU status for J&K bank has no legal connotations: Governor Satya Pal Malik

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Governor says the PSU proposal makes no new changes, promises review of accountability to legislature and defends decision to bring bank under RTI.

New Delhi: Governor Satya Pal Malik Tuesday said that the Public Sector Undertaking (PSU) status for the Jammu and Kashmir Bank has no “legal connotations”, adding that the bank will continue to operate under the Companies Act.

Malik further said that the state government would support all initiatives and take the necessary steps to make the bank a “vibrant institution”. The governor had met protesting employees of J&K Bank Tuesday.

The J&K Bank is the only one in the country to be owned by the state government, which has a 59 per cent stake in it under the special status for Jammu and Kashmir.

“The J&K Bank is registered as a government company under the Companies Act. The word PSU has no legal connotation,” Malik said in a statement. “J&K Bank continues to be a government-owned company. No new changes are being made here.”

There has been resentment in the Valley ever since the State Administrative Council (SAC), headed by Governor Malik, approved a proposal for treating J&K Bank Ltd as a public-sector undertaking.

The move came after the Governor dissolved the state assembly on 22 November.

As a PSU, the bank will be accountable to the state legislature, and the Finance Department will be required to place the bank’s annual report before the Assembly.

“As far as the accountability to the legislature is concerned, all government-owned/controlled companies, including J&K Bank that is registered as a government company, are accountable to the legislature in some respect,” Malik said. “This is what has been stated in the SAC decision. This does not add any new element.”

But in view of the concerns expressed, and to give comfort to employees, Malik said the government will re-examine the issue of accountability to the legislature.


Also read: J&K Governor Satya Pal Malik says no plans to tweak permanent residency rules


‘Old-generation private sector bank’

In his statement, Malik further said that the J&K Bank will be regulated by the Reserve Bank of India as an “old-generation private sector bank”.

“As far as the PSU matter is concerned, the J&K Bank is regulated by the RBI as an old generation private sector bank, by the Registrar of Companies as it is a government company under Companies Act and (iii) by SEBI as it is a listed company,” he said. “It will continue to be regulated by the RBI, SEBI and the Registrar of Companies. No changes are being made here or being contemplated.”

Malik also defended a provision in the SAC-approved proposal, which ruled that
the J&K Right to Information Act, 2009, will be applicable to the bank just like other state-owned undertakings.

“Nothing new is being imposed in this regard. Transparency is good for the bank in the long term,” he said, adding that as a government company, the bank is “automatically” subject to RTI provisions.

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