Despite stupendous macro and micro advances in money, banking and finance, driven by information and communication technologies, digitisation, globalisation, financial engineering and increasingly complex financial products, banks and banking remain pivotal to any economy. Their importance cannot be overstated. This is even more relevant for an economy like Jammu and Kashmir’s.Our economy continues to be an unusual mix of subsistence activity, agriculture, a large informal sector, government-dependent spending and a relatively small formal private economy struggling to expand. Add to this a landlocked geography, high logistics costs, decades of disruption, limited industrialisation, seasonal incomes and high unemployment, and access to capital becomes one of the most critical determinants of economic opportunity.

In an economy like ours, J&K Bank which enjoys almost a monopoly status becomes extremely important. Its significance is not merely because it is the major bank of J&K, but because the economic, financial and overall health of J&K is deeply intertwined with the flow of credit from this institution.The Bank itself says that it commands more than 61 per cent of the banking business in J&K and Ladakh. Of its 1,017 branches as of March 2026, 841 were located in J&K.

But there is an even more telling number.Of J&K Bank’s total deposits of about Rs.1.65 lakh crore as on March 31, 2026, nearly Rs.1.37 lakh crore—or about 83 per cent—came from J&K.This is the financial foundation upon which the Bank stands. In the not-too-distant past, there were negative features associated with the Bank—from patronage in lending to poor corporate governance and allied structural issues. To some extent, it needs to be said in the Bank’s favour, these have been remedied.

But it increasingly appears that the cost of this internal restructuring and changed external posture is being passed on to the ordinary people of J&K.Their access to capital, lending and credit is now determined by a tightening of the rule book. A difficult bureaucratic framework often makes access to capital cumbersome precisely for those small entrepreneurs who need institutional finance most.Meanwhile, the Bank’s own numbers reveal a dramatic shift. While nearly 83 per cent of deposits originate in J&K, only about 61 per cent of gross advances are deployed here.As of March........

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