J&K Bank Lending Row: 30.9% Growth Outside J&K vs 9.3% in UT Raises Questions Over Local Credit
By: News Desk | 06 September 2026
As J&K Bank posts record ₹2,363 crore profit, the sharp difference in credit growth between its home market and operations outside the Union Territory has triggered a wider debate over profitability, local development and the bank’s historic role in Jammu & Kashmir
Srinagar: The numbers tell a story that is difficult to ignore.
Jammu & Kashmir Bank ended the financial year 2025-26 with its highest-ever annual profit of ₹2,363.47 crore. Its overall gross advances climbed to nearly ₹1.25 lakh crore, while asset quality improved significantly compared with the previous year.
Yet behind those impressive headline figures lies a geographical divide that has now become the centre of a political and economic debate.
The bank’s gross advances in Jammu & Kashmir grew 9.3%, from ₹69,694 crore in March 2025 to ₹76,159 crore in March 2026. Outside J&K—including Ladakh and the rest of India—advances jumped 30.9%, from ₹37,292 crore to ₹48,822 crore. The figures come directly from the bank’s March 2026 earnings presentation.
That does not mean J&K has stopped being the bank’s principal lending market. Quite the opposite: the Union Territory still accounted for 60.9% of total gross advances at the end of March 2026.
But the pace of expansion tells another story.
Of the bank’s roughly ₹17,995 crore increase in gross advances during FY2025-26, about ₹11,530 crore came from the Rest of India portfolio, compared with ₹6,465 crore from J&K. In other words, approximately 64% of incremental lending came from outside J&K and Ladakh, while about 36% came from the home market.
For a bank whose identity has been deeply intertwined with Jammu & Kashmir for generations, that shift inevitably raises a larger question:
Is J&K Bank becoming a national bank with a regional origin, or should it continue to function as a financial engine specifically geared towards the economic needs of Jammu & Kashmir?
That is the question now being asked in political circles, among sections of the business community and increasingly in public debate.
The numbers behind the J&K Bank lending debate
The geographical split becomes clearer when the March 2025 and March 2026 figures are placed side by side.
| Region | Gross Advances March 2025 | Gross Advances March 2026 | Growth | Increment |
|---|---|---|---|---|
| J&K UT | ₹69,694 crore | ₹76,159 crore | 9.3% | ₹6,465 crore |
| Rest of India, including Ladakh | ₹37,292 crore | ₹48,822 crore | 30.9% | ₹11,530 crore |
| Bank as a whole | ₹1,06,985 crore | ₹1,24,981 crore | 16.8% | ₹17,995 crore |
The figures show two things simultaneously.
First, J&K remains the dominant market for the bank. Its ₹76,159-crore loan book is substantially larger than the ₹48,822 crore outside the region.
Second, the bank’s fastest growth is now coming from outside its traditional home market.
That distinction matters.
It would be misleading to describe the figures as evidence that J&K Bank has abandoned lending in Jammu & Kashmir. Lending there increased by more than ₹6,400 crore in one year.
But it would be equally difficult to ignore the fact that the Rest of India portfolio expanded by nearly ₹11,500 crore during the same period.
The debate, therefore, is less about whether the bank lends in J&K and more about where the next rupee of credit is being deployed and why.
Why the composition of loans matters more than the headline growth rate
There is another important detail hidden inside the numbers.
The two geographical portfolios are not built in the same way.
According to the bank’s March 2026 presentation, personal loans accounted for 49% of gross advances in J&K, followed by agriculture at 15%, SME lending at 14%, trade at 12% and corporate lending at 7%.
Outside J&K and Ladakh, the picture is dramatically different.
Corporate lending accounted for 73% of gross advances, while personal finance stood at 14%, trade at 2%, agriculture at 3% and SME lending at 3%.
This is arguably the most important economic fact in the current controversy.
The bank is not simply lending more outside J&K. It is lending into a different market structure.
The external portfolio is overwhelmingly corporate-led, while the J&K portfolio has a much larger exposure to households, agriculture, small businesses and traders.
That difference can have several explanations.
Large corporate borrowers can require substantial credit in a single transaction. A bank can therefore increase its advances rapidly through a relatively small number of large accounts.
By contrast, financing agriculture, small enterprises, artisans, traders and individual entrepreneurs involves thousands of borrowers, smaller ticket sizes, documentation, credit assessment and often greater administrative effort.
So a faster growth rate outside the UT does not automatically prove preferential treatment.
But it does raise an important policy question: is the distribution of credit adequately aligned with J&K’s employment and development needs?
Altaf Bukhari puts the question directly to J&K Bank
The issue entered the political spotlight after Apni Party president and former Jammu & Kashmir finance minister Altaf Bukhari publicly criticised the bank’s lending strategy.
Bukhari argued that the difference between roughly 9% credit growth in J&K and around 30% outside the region suggested that the bank was reducing its focus on its traditional market.
He described J&K Bank as a “jewel in the crown” and questioned why credit expansion should be significantly faster outside the Union Territory when the bank has historically played such an important role in the regional economy.
His criticism did not stop with lending.
Bukhari also raised concerns about recruitment, representation on the bank’s Board of Directors and reports of a possible shift of the headquarters from Srinagar. He urged political parties, civil society groups, chambers of commerce and other stakeholders to take note of what he described as a gradual drift away from J&K’s interests.
Those are political allegations, however, and should not be confused with established findings of regulatory wrongdoing.
The lending figures themselves are official.
The interpretation placed on those figures is where the political disagreement begins.
The NPA argument does not support Bukhari’s claim as stated
One of the more significant points requiring clarification concerns non-performing assets.
Bukhari questioned the bank’s lending strategy while arguing that NPAs outside J&K were substantially higher.
But the bank’s own March 2026 geographical data presents a different picture.
Gross NPAs in the J&K portfolio stood at approximately ₹2,332 crore, compared with about ₹793 crore in the Rest of India portfolio. However, J&K also had the much larger loan book.
When measured as a percentage of gross advances, the difference becomes clearer:
- J&K UT: about 3.1%
- Rest of India including Ladakh: about 1.6%
The bank’s overall gross NPA ratio was 2.50%, down from 3.37% a year earlier.
So the available March 2026 figures do not support the claim that NPAs are higher outside J&K.
In fact, the opposite is true on a ratio basis.
That does not settle the broader lending debate. A lower NPA ratio outside J&K could be one reason management is comfortable expanding the external portfolio faster. It also demonstrates why lending decisions cannot be assessed purely on political geography.
For a bank, credit quality matters.
So do economic development, employment generation and market opportunity.
The challenge is balancing all three.
Record profits complicate the criticism
There is an uncomfortable irony at the heart of the controversy.
The same year in which questions were raised about the bank’s regional lending focus was also the year in which J&K Bank produced the strongest financial performance in its history.
The bank reported ₹2,363.47 crore in net profit for FY2025-26, compared with ₹2,082.46 crore in FY2024-25—a 13.5% increase.
Total deposits rose to ₹1,65,354 crore, while net advances reached ₹1,22,641 crore. Gross NPA improved to 2.50%, and the bank said its provision coverage ratio exceeded 90%.
The bank’s management has described the results as evidence of improved operational efficiency, stronger asset quality and disciplined execution.
MD and CEO Amitava Chatterjee has also acknowledged that the local operating environment has been challenging, while pointing to the bank’s resilience and improved financial health.
This creates an important distinction.
A profitable bank is not necessarily a bank that is doing everything a regional economy needs.
Conversely, a bank expanding nationally is not necessarily neglecting its home market.
The real question is whether commercial expansion and regional responsibility can coexist.
J&K’s credit problem is bigger than one bank
There is another reason the controversy deserves a broader reading.
Jammu & Kashmir’s problem is not simply whether J&K Bank is lending enough.
It is whether the banking system as a whole is converting deposits into productive investment quickly enough.
At the UT-level Bankers’ Committee meeting held in April 2026, the J&K administration said banks had disbursed ₹63,892 crore to 14.56 lakh beneficiaries during the first three quarters of FY2025-26.
At the same meeting, officials flagged the Union Territory’s relatively low Credit-Deposit ratio of around 61%, compared with a national average of roughly 81%, and called for greater credit deployment.
That is a much bigger economic signal.
It suggests that the discussion should not be reduced to a simple “local versus outsider” argument.
The real development question is:
How effectively is financial capital mobilised in J&K being converted into investment, businesses, infrastructure and jobs within J&K?
That is where the banking sector’s impact on the wider economy becomes visible.
Agriculture and small businesses need more than loan schemes on paper
J&K’s economy has a large base of agriculture, horticulture, tourism, handicrafts, transport, retail and micro and small enterprises.
These businesses typically do not borrow in the same way as large corporations.
A large company may negotiate a substantial credit facility through a structured relationship with a bank.
A small entrepreneur may need ₹5 lakh, ₹10 lakh or ₹20 lakh to purchase equipment, renovate a shop, buy inventory, build a homestay, expand a workshop or finance seasonal working capital.
For that borrower, speed and predictability can matter almost as much as the interest rate.
A loan that arrives after the business opportunity has passed is of limited value.
This is why complaints about paperwork, delays, collateral requirements or repeated branch visits—where they occur—can have an economic effect far beyond individual inconvenience.
J&K Bank itself offers a wide range of agriculture, MSME, tourism and government-linked lending products.
Its current product portfolio includes Kisan Credit Card facilities, agriculture and allied activity loans, PM Formalisation of Micro Food Processing Enterprises financing, MSME credit, tourism-related products and schemes linked to youth entrepreneurship.
The existence of these schemes is important.
But the next question is whether eligible borrowers can access them quickly, transparently and at scale.
The administration itself has called for easier credit access
Interestingly, the official banking discussions in J&K show that access to priority-sector credit remains an ongoing policy concern.
In November 2025, Chief Secretary Atal Dulloo called on banks to provide hassle-free credit under programmes including the Holistic Agriculture Development Programme, PM Vishwakarma, Mission YUVA and homestay initiatives.
He also called for stronger lending to agriculture, housing, education and other priority sectors and better banking outreach in unbanked and under-banked areas.
By April 2026, the administration was again pressing banks to achieve priority-sector targets and expand banking touchpoints.
At the same meeting, officials reported that ₹44,228.30 crore—about 69% of total credit disbursed during FY2025-26—had gone to priority sectors, with J&K Bank accounting for 63.41% of the banking sector’s priority-sector credit contribution in the UT.
This is significant because it complicates the narrative of wholesale neglect.
The official data shows that substantial priority-sector credit is being provided.
The concern, therefore, is less about whether priority lending exists and more about whether its scale, distribution and delivery are sufficient for the economy’s needs.
The “outsider advantage” claim needs evidence, not assumption
One of the strongest claims in the original controversy is that outsiders or large corporate clients receive disproportionately better treatment than local borrowers.
That is a serious allegation.
But publicly available financial data does not, by itself, establish that individual borrowers are being treated differently because they are from outside J&K.
The geographical lending figures show where the bank’s advances are located and how quickly they are growing.
They do not identify individual borrowers, sanction practices, branch-level service quality or whether a local borrower was denied a loan that was subsequently granted to an outsider under comparable circumstances.
The distinction matters.
Large corporate lending outside J&K can rise rapidly simply because corporate loan sizes are much larger.
The bank’s own figures demonstrate precisely this difference: corporate loans represented 73% of the Rest of India portfolio, compared with just 7% in J&K.
That does not invalidate concerns about fairness.
It simply means that allegations of discriminatory lending require borrower-level evidence, not just aggregate geographical figures.
Recruitment is emerging as the second front in the dispute
Credit is not the only issue.
Employment has become another sensitive part of the debate surrounding J&K Bank’s national expansion.
Bukhari has expressed concern over reports of a recruitment model that could allow more hiring of candidates outside J&K for operations outside the Union Territory.
His argument is straightforward: J&K Bank has historically been an important employment avenue for educated youth in the region, and changing that model could reduce opportunities for local candidates.
But the bank’s expansion creates an operational question as well.
A bank operating across India needs employees who understand the markets, languages and customers of the places where it operates.
That makes local recruitment outside J&K commercially understandable.
The policy challenge is therefore not necessarily whether the bank should hire outside J&K.
It is whether national recruitment should come at the expense of reasonable employment opportunities for the bank’s traditional talent pool in Jammu & Kashmir.
That is a question that deserves a transparent policy rather than political speculation.
What about the reported headquarters shift?
Bukhari has also raised concerns over reports that efforts could be underway to shift J&K Bank’s headquarters from Srinagar.
As of the latest publicly available official information reviewed for this report, however, the bank continues to list its Registered Office and Corporate Headquarters at M.A. Road, Srinagar.
The bank’s own 2026 communications continue to identify the Srinagar premises as its Corporate Headquarters.
Therefore, a reported future relocation should be treated as an allegation or proposal unless and until the bank or the relevant authorities formally confirm such a move.
For J&K, however, even the possibility carries symbolic weight.
J&K Bank is not viewed merely as another commercial institution. It was established in 1938 and became deeply woven into the region’s financial and economic life.
Its headquarters, employment patterns and lending decisions therefore carry an emotional as well as an economic significance.
The bank’s national expansion is not necessarily a threat to J&K
There is a strong argument on the other side.
A stronger national J&K Bank can ultimately benefit its home market.
Expansion can diversify earnings, increase profitability, strengthen capital, improve technology and reduce excessive dependence on one regional economy.
That matters because J&K itself has faced repeated economic disruptions.
Tourism shocks, security incidents, weather events, floods and broader geopolitical uncertainty can all affect local credit demand and repayment capacity.
A geographically diversified bank is potentially better positioned to absorb such shocks.
The bank’s record FY2025-26 profit is evidence that the strategy is producing financial results.
The question is therefore not whether national expansion should happen.
It is whether that expansion should be accompanied by a stronger, rather than weaker, commitment to the bank’s home economy.
What J&K needs is productive credit, not simply more credit
For Jammu & Kashmir, the quality of credit matters enormously.
A loan to a farmer who modernises an orchard can generate recurring economic activity.
A loan to a young entrepreneur can create jobs.
Finance for a homestay can support tourism, transport, food suppliers and local handicrafts.
Working capital for a small manufacturer can keep dozens of workers employed.
Credit for food processing can connect agriculture with higher-value markets.
This is why the discussion around J&K Bank should move beyond the crude question of whether lending is “up” or “down”.
The better questions are:
- How much credit is reaching micro and small enterprises?
- How quickly are viable loans being sanctioned?
- How much financing is reaching agriculture and horticulture?
- What proportion of lending creates direct employment?
- How much credit reaches first-time entrepreneurs?
- Which districts have persistently low credit-deposit ratios?
- How does the bank’s recovery rate differ between sectors?
- Are viable borrowers being rejected because of documentation or collateral barriers?
- How much new credit is going into productive investment rather than refinancing existing liabilities?
Those are the numbers that could turn the current political argument into a meaningful economic audit.
A regional bank at a national crossroads
J&K Bank now finds itself at an interesting point in its history.
Its balance sheet is expanding.
Its profitability is at a record high.
Its asset quality has improved.
Its national footprint is growing.
But the institution remains economically and emotionally tied to Jammu & Kashmir.
That creates a tension between two identities.
One is the commercial bank, competing nationally, pursuing profitable lending opportunities and managing risk.
The other is the regional financial institution, expected to support agriculture, entrepreneurship, employment and investment in the territory from which it emerged.
Neither identity can simply be wished away.
A bank cannot be expected to compromise prudent lending merely because a borrower is local.
At the same time, a regional economy cannot afford to see its most important home-grown financial institution become disconnected from the financing needs of its own businesses and people.
The answer lies somewhere between those extremes.
The bigger question: who benefits from J&K Bank’s growth?
The current controversy may ultimately prove useful if it pushes the debate away from political slogans and towards measurable outcomes.
The March 2026 figures clearly show that J&K Bank’s outside portfolio is growing much faster than its J&K portfolio.
They also show that J&K remains the bank’s largest market.
They show a fundamentally different lending mix: corporate-heavy outside J&K, and more retail, agriculture, SME and trade-oriented within the UT.
They show that J&K’s gross NPA ratio is higher than the external portfolio, contrary to claims that the outside portfolio has higher NPAs.
And they show a bank in substantially better financial health than it was several years ago.
None of these facts, on their own, proves neglect.
But together they raise an important policy question that deserves a serious answer:
As J&K Bank grows into a stronger national institution, how much of that strength will be translated into stronger credit, investment and employment inside Jammu & Kashmir?
That is likely to be the real test of the bank’s next chapter.
The issue is not whether J&K Bank should make money.
It should.
The issue is whether commercial success and regional responsibility can grow together.
For the farmer waiting for seasonal finance, the young entrepreneur searching for startup capital, the trader needing working capital and the small business owner trying to preserve jobs, that distinction is not academic.
It is the difference between a bank that merely operates in J&K and one that continues to build J&K.
