The terror attack on tourists in Pahalgam that killed 26 people might affect the local economy but it will not have much impact on Jammu and Kashmir Bank as the lender’s exposure to the tourism industry is around one per cent of the total portfolio, MD & CEO of the bank Amitava Chatterjee said on Monday. “It is a matter of prudence that we have already done this assessment. One part of it is the direct impact. The total exposure related to the tourism industry in Jammu and Kashmir is just one per cent of our total portfolio.
“The direct impact will be nominal, even if it is there,” Chatterjee told PTI.
He said it has been witnessed in the past as well that people in Jammu and Kashmir and Ladakh generally do not want to default on their loans.
“We have seen this happen in the past and the impact has not been much. During the days, when tourism was not that strongly influencing the economy of this geography, the highest level of stress that we had was 14 per cent.
“And within a span of two to three years it came down to two to three per cent. So, the resilience of this sector is always there. I don’t think there will be any direct impact, even if it is there. It may be for the economy.
“For the indirect impact, we will have to wait and watch as to how much it is going to affect the entire economy of Jammu and Kashmir. That might affect some other sectors which might again affect the bank. As I said earlier, the overall NPA in this region is very low. So I believe the resilience shown by the citizens of this territory and the propensity to repay loan is very high. General people do not want to default,” he added.
Jammu & Kashmir Bank on Monday reported over 8 per cent decline in net profit to Rs 584.54 crore for the January-March quarter of 2024-25 compared to Rs 638.67 crore in the year-ago period.
On a sequential basis, its net profit rose by 10 per cent compared to Rs 531.51 crore in the previous December quarter of FY 2024-25, according to an exchange filing by the bank.