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Six months on, new MD of J&K Bank not cleared by RBI

Last Updated on October 29, 2020 at 6:07 pm

It has been six months since the new Managing Director (MD) of J&K Bank has been appointed but still, the government has not made any effort to get clearance for him from the Reserve Bank of India (RBI).

This left the previous in-charge chairman of the bank with both the posts of Chairman and Managing Director. The government has pledged that it will split the post of Chairman and MD of the bank, even though the combined post arrangement continues.

Senior government officials are calling it a non-issue and are not talking about the issue on record. They insist that they have transparency in J&K Bank and made it one of the safest banks.

J&K Bank invited applications for the post of MD from April24, 2020. 38 candidates applied for the post according to the sources. Interviews for shortlisted candidates were held by a committee on May 12, 2020.

The Committee comprised three members under the chairmanship of Ex Union Corporate Affairs Secretary, Tapan Ray, Financial Commissioner, J&K, Dr Arun Kumar Mehta and Officer on Special Duty (OSD) in the department of Financial Services, Union Ministry of Finance, Anand Madhukar.

Zubair Iqbal, senior vice president at HDFC Bank, was selected and appointed to the post of MD at J&K Bank. The Finance department of the J&K Government issued an order nominating him as a government nominee for director on the Board of J&K Bank for a period of three years. After that, the Board of Directors of J&K Bank Ltd. in its Board meeting passed a resolution appointing him as Managing Director for a period of three years on May 17, 2020.

On May 16, Iqbal resigned from HDFC Bank and joined J&K Bank on May 18.

But on May 27, he was advised by the Finance Department of the J&K government to not come to office till the RBI clearance is received. Generally, RBI clears such appointments within 90 days, but this has been an unusual case. The RBI last communicated with the bank on October 5 to extend the term of the current CMD by six months or till an MD is appointed, whichever is earlier.

Many experts believe that this delay is caused by the current economic slowdown which the RBI is facing, so the RBI has put non-emergency issues for later. While others believe that this delay is caused by the government’s lack of interest in the issue.