Something is brewing at J&K Bank. A trial balloon has been floated that the J&K Bank should grow its rest-of-India (ROI) business by recruiting there. Unidentified “financial experts”, talking to unnamed reporters of a prominent Jammu-based English daily, have advocated more lending outside the local economy. 

The ROI portfolio, it is contended, is no longer just a growth target but an “existential necessity for the Bank’s long-term financial viability”. Were it not so flawed in economic and financial reasoning, this could be laughed off as a bad joke. The amateurish narrative, and the agenda behind it, needs to be called out.The outward-looking strategy is flawed financially, commercially, economically and developmentally. It is a bad bargain for the Bank, the people and the government of J&K.

The inward-looking policy from 2006 rested on a self-evident opportunity: J&K, with 0.70 per cent of national GDP, received only 0.30 per cent of national credit. With about one per cent of the population, its share of the national personal-loan stock was 0.27 per cent. The state was credit-starved despite SBI, PNB and the other big daddies of Indian banking.That strategy set out in the 2006-07 Annual Report doubled credit inflow even as the share in national output rose only marginally. As on March 2026, J&K accounts for 0.79 per cent of national output and absorbs 0.62 per cent of overall credit. The region remains under-banked on the asset side relative to output, and more so relative to its own deposits.

The Bank mobilises about Rs 1,45,000 crore i.e. 80 per cent of its deposits locally yet ploughs back only Rs 80,000 crore into the local economy. By contrast, it raises about Rs 30,000 crore in ROI and has deployed Rs 50,000 crore in credit as of June 2026: a credit-deposit ratio of nearly 170 per cent, almost three times the local ratio. The proposed strategy would........

© Greater Kashmir