Two well known Auditors of the Jammu and Kashmir Bank under considerable influence and pressure to change the Memorandum of Change (MoC) of a Mumbai based real estate company who have defaulted on payments worth Rs 400 crores to J&K Bank.

Sources told Kashmir Monitor that these two auditors during the Audit of the Bandra Brach had declared the account of this real estate company as a non performing asset (NPA).But on their return to bank’s corporate headquarters this week the duo are under tremendous pressure to change the MoC of the account to show it as a standard account instead of an NPA. The duo so far have resisted the pressure though.

“What the management of the bank is trying to do is nothing less than murdering a peoples asset. They are cheating everyone including their own self. They must come with the true picture otherwise we are looking at the end of the cliff”, says an official of the J&K Bank.

Sources say that Bank management in order to cover up the losses are now trying to show a reduction in the NPA balance instead of revealing the true picture.” If the real value of NPA’s is not declared then the JK Bank will pay income tax on NPA’s as well. It is a double loss situation and management seems to be hell bent on doing it”, adds another official.

When contacted one of the two Auditors had this to say to Kashmir Monitor,” I have nothing to do with Bandra branch. The Audit is on and we have not decided on anything yet”, he said.

The other auditor when contacted denied any wrong doing or pressure and instead said,” There is no question of MoC being changed. The NPA may go up than come down”.

The memorandum of changes generally accompanies the branch audit reports. Any changes that are material and which have an impact on assets and liabilities, classification of advances and profit and loss account are suggested through memorandum of changes, which form part of auditors’ report.

Normally before the final report auditors observations are incorporated in the books of account and modified financial statements are prepared while in case of banks by the time report is sent by auditors there is compilation at regional and Zonal level hence there is another statement called Memorandum of Changes (MOC). Main report must state about this and also shall mention whether MOC is nil or contains observation.

As already reported the annual balance sheet of J&K Bank may have to be recast in view of the news reports that the Bank has concealed Rs 2,500 crores of NPAs and stressed assets.

The biggest loan of Rs 650 which has not been declared by J&K Bank as NPA violating the RBI norms is REI Agro, a Kolkatta based company engaged in agro and ancillary business. The accounts of the company have been declared NPA by all other bank but J&K Bank continues to show it as a standard loan.

The United Bank of India has filed a winding up petition against this company for non-payments of Rs 224 crore outstanding dues. The United Bank of India said that it has followed all other recourses for recovering the amount but the company is in no position to service it. "The viability of the company is in question," UBI said in a press statement issued on 14th of May 2014.

The other large loan that is an NPA but has not been classified is a real estate company of Mumbai, which has taken Rs 400 crores from J&K Bank and the cheques which the bank has purchased from the company have bounced more than once. (Kashmir Monitor)