CAG flags ‘bungling, wasteful expenditure’ in Jammu and Kashmir bank

Comptroller and auditor general (CAG) has pointed out “bunglings and wasteful” expenditure in UT’s largest bank, the Jammu and Kashmir Bank.

According to the report, the bank purchased land valuing ₹184.92 crore between 2016-21, of which land valuing ₹140.22 crore could not be utilised, adding, “Funds to the tune of ₹22.78 crore remained blocked due to improper planning. There was wasteful expenditure of ₹5.28 crore in hiring of premises.”

“Increase of lease rent in violation of the lease agreement led to extra expenditure of ₹2.61 crore. Due to hiring of unfurnished premises, the bank had to pay lease rent of ₹5.14 crore as it took considerable time in furnishing works leading to delay in relocation of business units. There were delays in execution of works, however, a penalty amounting to ₹8.77 crore was not recovered from contractors,” the report said.

The bank, notably, functioned from owned or hired premises. In 2017, the bank’s board of directors approved the policy for acquisition of premises on lease/rent or outright purchases.

“Out of the land valuing ₹184.92 crore acquired during 2016-17 to 2020-21, the bank could not the utilise land valuing ₹117.72 crore at Ram Kishore Road, New Delhi, and land valuing ₹22.50 crore at Pampore, Srinagar, even after lapse of more than five years and three years respectively,” the report said.

Further, it highlighted funds to the tune of ₹ 22.78 crore utilised for acquisition of land and related construction in Jammu staying blocked without any benefit due to improper planning. The audit also noticed that the bank did not appraise its board of directors on the status of land acquired/utilised by it during 2016-21, thus depriving the BoDs to initiate any remedial action.

The report also found misappropriation in development of Kashmir Golf Course, saying the bank invited tenders for its redevelopment in March 2016 at an estimated cost of ₹16.35 crore in response to which two offers were received.

“Only one bidder was found technically qualified. After negotiations, the contractor agreed to execute the work at ₹22.92 crore. The bank awarded the work to the contractor citing urgency… and the work was completed in December 2017 at a total cost of ₹30.35 crore,” the CAG report read, adding that the bank did not re-tender the work and awarded it to the only technically-qualified bidder in June 2016 despite the fact that the rates agreed to by the bank were 40% higher than the estimated cost.

“The bank’s target to complete the work before onset of winters was not achieved as the work was completed in December 2017 with a delay of 10 months,” it added.

The CAG report further pointed out that the bank could not utilise land valuing ₹140.22 crore acquired during 2016-21, while also highlighting several other examples that ascertained the bank suffered losses due to the wrong decisions taken by officials.