Applicants allege guarantor demands despite government waivers; bank yet to offer a detailed response
TAUSEEF AHMAD
SRINAGAR, Jan 5: Jammu and Kashmir Bank, the largest financial institution in the Union Territory, is facing renewed public criticism amid a surge in complaints related to delayed loan processing, alleged insistence on guarantors contrary to government guidelines, malfunctioning digital services, and concerns over customer service and institutional governance.
Residents from several districts across the Kashmir Valley have raised questions about the on-ground implementation of government-backed financial inclusion schemes, particularly those aimed at unemployed youth, women artisans, shawl workers, and small entrepreneurs.
While authorities have repeatedly announced simplified loan procedures and collateral-free credit under various schemes, many applicants allege that these assurances are not being reflected at the branch level.
According to several complainants, loan applications submitted under self-employment and MSME schemes often remain pending for months despite the completion of formalities. Some applicants further allege that approvals are expedited only when intermediaries or “agents” intervene—claims that the bank has not officially responded to so far.
The issue of guarantors has emerged as a major point of contention. In 2023, the government announced that loans up to ₹10 lakh under certain MSME and self-employment schemes would not require collateral or third-party guarantees. However, multiple applicants allege that branches continue to insist on guarantors, preferably government employees, effectively excluding economically weaker individuals who lack such connections.
“I applied for a ₹3 lakh loan for my tailoring unit after completing all required formalities. Despite two rounds of verification, my application was rejected on the grounds that I could not produce a government employee as a guarantor, even though the scheme did not require one,” said Rameez Ahmad, a resident of North Kashmir.
Ahmad said he later approached Punjab National Bank, where his loan was sanctioned within a week without any such requirement. “Here, it appears loans move faster if one approaches through middlemen,” he alleged, while acknowledging that he could not independently verify whether this was a systemic practice or limited to certain branches.
Several women engaged in handicrafts and traditional shawl weaving echoed similar concerns, stating that promised subsidies, easy credit, and institutional support remain largely inaccessible. Many said they were encouraged to submit applications during awareness drives but later found little follow-up from banks.
Beyond loan-related grievances, customers have also expressed frustration over frequent disruptions in J&K Bank’s digital services. Traders across major markets reported failures in QR-based payment systems and the bank’s mPay platform, particularly during peak business periods and festivals, leading to financial losses and inconvenience.
ATM outages, especially in rural and semi-urban areas, have further compounded the problem. Residents allege that machines often remain non-functional for days, leaving people dependent on cash without alternatives.
Equally concerning for customers is what they describe as indifferent or rude behaviour by some bank staff at branch levels. Several residents complained that basic queries are met with dismissive responses and that grievance redressal mechanisms rarely provide timely relief.
“People go to withdraw or deposit their own money, yet they are sometimes made to feel unwelcome,” said a senior citizen from Bandipora. “For a bank that caters to a significant portion of J&K’s population, such conduct damages trust.”
The criticism comes against the backdrop of longstanding concerns over governance and compliance at the bank. According to official records and media reports, the Anti-Corruption Bureau has registered at least 22 cases against J&K Bank officials, including senior officers, since 2019. Several of these cases remain under investigation.
Central agencies have also flagged financial irregularities. The Income Tax Department, as reported earlier, detected thousands of non-PAN-linked accounts involving high-value transactions, raising questions about monitoring and regulatory compliance.
Cybersecurity concerns have further impacted public perception. In a major crackdown in 2025, authorities seized over 7,000 bank accounts linked to cyber fraud, many of which were reportedly maintained with J&K Bank. Investigators cited weaknesses in account verification and transaction oversight, though officials have maintained that banks are often exploited by sophisticated fraud networks.
Recruitment practices at the bank have also attracted scrutiny. The Central Bureau of Investigation filed a chargesheet in a recruitment scam involving alleged irregular appointments and manipulation in the selection process. The case sparked widespread outrage, particularly among unemployed youth who had invested years preparing for competitive examinations.
Adding to these concerns, banking experts and former employees have pointed to gaps in staff training and skill upgradation. Unlike private sector banks, where continuous refresher courses are mandatory, J&K Bank is alleged to lag in structured training programmes. In some cases, employees with limited experience are reportedly assigned to sensitive public-facing roles, including cash handling, without adequate preparation.
“There have been instances where staff unfamiliar with basic banking procedures are managing critical counters,” said a businessman from North Kashmir. “This affects service quality and also increases the risk of operational errors.”
Despite holding nearly half of the banking market share in Jammu and Kashmir and playing a pivotal role in the region’s economy, critics argue that J&K Bank must urgently modernise its systems, strengthen internal oversight, and rebuild public confidence.
Efforts to obtain an official response from the bank yielded limited results. After repeated attempts to contact the corporate communications department, one official advised reaching out to customer care. However, multiple calls to the helpline reportedly went unanswered.
Observers note that as a public-sector institution with deep roots in Jammu and Kashmir, J&K Bank carries both economic and social responsibility. Addressing public grievances transparently, ensuring uniform implementation of government schemes, and improving customer engagement, they argue, will be critical to restoring trust in the institution.
