Jammu: The Jammu & Kashmir State Cooperative Agriculture and Rural Development (SCARD) Bank Ltd. has been grappling with prolonged operational and financial difficulties, prompting the government to approve its liquidation, officials said on Thursday.
According to the Cooperative Department, the bank’s challenges stem from weaknesses in governance and internal control mechanisms, poor loan recovery performance, and limited access to refinance support from the National Bank for Agriculture and Rural Development (NABARD). Collectively, these factors have significantly affected the bank’s financial health and routine operations.
The issues were examined in detail by the Cooperative Department in close consultation with NABARD. Based on its supervisory assessments, NABARD advised a regulated, closely monitored, and structured course of action aimed at protecting the interests of depositors and other stakeholders while ensuring an orderly, transparent, and legally compliant process.
Acting on these recommendations, the Cooperative Department has completed a special Know Your Customer (KYC) verification exercise across all branches of the bank, including the Head Office and Regional Office. The exercise covered all account holders—both depositors and loanees—and was undertaken to verify the authenticity of accounts and ensure that the interests of genuine depositors are clearly identified and protected in any future course of action.
The government has since approved a proposal for the liquidation of the SCARD Bank, with explicit directions to the Cooperative Department to frame a clear mechanism for safeguarding depositor interests. In compliance, the department has formulated a phased and legally compliant plan in accordance with the provisions of the Jammu and Kashmir Cooperative Societies Act, 1989, with a focus on minimizing inconvenience to depositors.
Officials said the department is currently awaiting prior written sanction from NABARD, as mandated under Section 74(4) of the J&K Cooperative Societies Act, 1989, to proceed further. The approval is expected shortly.
Acknowledging the concerns and anxieties of depositors, the Cooperative Department assured that protecting their interests remains its foremost priority. It reiterated that all actions are being undertaken with due diligence, transparency, and appropriate regulatory oversight to ensure that depositor claims are addressed in a fair, systematic, and orderly manner.
The department also stated that it remains in close coordination with other concerned departments of the Jammu and Kashmir government and regulatory institutions, reaffirming its commitment to act responsibly, lawfully, and in a depositor-centric manner in the larger public interest.
