This private bank shall give 7.25% return on 1 to 2 yrs FD effective from Feb 11
3 min read 10 Feb 2023, 03:54 PM ISTIncorporated in 1938, Jammu and Kashmir Bank (J&K Bank) is one of India's oldest private sector banks and a scheduled commercial bank.
PremiumIncorporated in 1938, Jammu and Kashmir Bank (J&K Bank) is one of India's oldest private sector banks and a scheduled commercial bank. The bank raised the interest rates it pays on fixed deposits under Rs. 2 crore, and the new rates will take effect tomorrow, February 11, 2023. The Jammu and Kashmir Bank's announcement came after the RBI raised its key repo rate by 25 basis points to 6.50% on Wednesday.
Jammu and Kashmir Bank FD Rates
On deposits maturing in 7 days to 30 days, the bank will continue to give an interest rate of 3.50% and on those maturing in 31 days to 45 days, Jammu and Kashmir Bank (J&K Bank) will continue to give an interest rate of 3.70%. Jammu and Kashmir Bank (J&K Bank) has hiked the interest rate by 25 bps from 4.50% to 4.75% on a deposit tenor of 46 days to 180 days and the bank will continue to offer an interest rate of 5.50% on a deposit tenor of 181 days to 270 days.
Deposits maturing in 271 days to less than 1 year will now earn interest at a rate of 6.00%, up from 5.75% before, representing a 25 basis point increase. Deposits maturing in 1 year to less than 2 years will now earn interest at 7.25%, up from 6.75% previously. Customers will get interest at a rate of 6.75% on deposits held for two to three years or less, while Jammu and Kashmir Bank (J&K Bank) will offer an interest rate of 6.50% on deposits held for three to ten years.
The aforementioned rates are valid for new deposits and the renewal of maturing accounts for balances under ₹2.00 crores. Domestic term deposits held by senior citizens who have reached the age of 60 will also continue to earn an additional 0.50% rate for all maturities over and above the regular rates.
J&K Bank's net profit recorded a 79% rise year-on-year (YoY) to ₹311.59 crore in Q3FY23 against ₹173.95 Cr registered in Q3FY22. In contrast to the ₹993.30 Cr reported in the December quarter of the previous year, the Bank's Net Interest Income (NII) increased by 27% YoY to ₹1257.38 Cr for the December 2022 quarter, while the Operating Profit increased by 65% YoY to ₹544.11 Cr. In addition, the bank's NIM grew by 54 basis points (bps) year on year to 4.10%, the highest level in the previous seven years, and the Return on Assets (RoA) increased to 0.92% for Q3FY23 from 0.57% reported in the year-ago quarter. As a result of an increase in yield on advances of 90 basis points to 9.34%, the bank's cost-to-income ratio decreased even further in the third quarter of FY23 to 63.71%.
Commenting upon the quarterly growth numbers, MD & CEO Baldev Prakash said, “Driven largely by an improving asset-quality through better SMA management and vigorous recoveries, we have achieved a better set of numbers in our December quarter. And we remain committed to sustained improvement in our overall functioning and the operating results as communicated in our financial-year guidelines."
For the quarter ended December 2022, the bank's Gross NPA Ratio decreased further by 168 bps YoY and 42 bps QoQ to 7.25%, while the Net NPA Ratio declined by 94 bps YoY to 2.08%. The bank's provision coverage ratio (PCR) for Q3FY23 was 84.83%. “Through an ensured institutional focus on the asset-quality, we have brought down our Net NPAs to 2.08%, which is the lowest in last eight years. While each passing quarter is witnessing an improvement in our GNPA figure, we have reduced it further to around 7%, and our Provision Coverage Ratio for the quarter is about 85%", said the MD & CEO regarding the bank’s asset-quality. “And with strict regime of early-warning systems, pro-active monitoring and review mechanisms at all levels coupled with rolling out of timely OTS schemes, we are confident of reducing our gross NPAs to around 6% by the end of fiscal", he added.
During the quarter under review, the bank's net advances increased by 14% YoY and 4% QoQ to ₹77639 Cr, while deposits increased by 8%, from ₹109298 Cr to ₹117935 Cr. The bank's overall business climbed by 10% to ₹195574 from ₹177664 Cr reported in the year-ago quarter, and its CASA Ratio, which is currently at roughly 54%, continues to be among the best in the industry. “Both our advances and deposits have grown by 14% and 8% respectively, which are quite in line with industry averages. However, witnessing growth at 21%, the Rest-ofIndia share in the overall loan-book has crossed 30% mark during the December quarter in line with the financial-year guidelines", said MD & CEO while commenting on growth numbers.
