Pallavi Sareen
Jammu, Oct 25: Jammu and Kashmir Bank spent 46.96 Crore of its CSR fund meant for upliftment of the marginalised and under-privileged on re-development of Kashmir Golf Course, amusement Park and printing of Ration cards issued by State government.
Expenditure of Rs 6.28 on Amusement Park in Pahalgam which is an entertainment spot was categorised under “Ecology/Environment” segment. Rs 39.17 crore was spent on redevelopment of Kashmir Golf Course in direct contravention to CSR’s objective. Money which could have been utilised on the upliftment of the marginalised was used on the golf course, which is a preserve of the elite.
The Bank also spent 1.51 crore on printing of Ration Cards (RCs) issued by State Government during 2015-16, despite the same being responsibility of state government. Furthermore, the cost of printing those Ration Cards was charged from beneficiaries. Corporate Social Responsibility is mandated by Companies Act, 2013 and J&K bank mentioned in its CSR objectives that it is committed to operate in an economically, socially and environmentally sustainable manner, so as to ensure upliftment of the marginalized and under-privileged sections of the society.
According to the CAG Audit Report (Revenue Sector and PSUs) for the year ended 31 March 2018, the Bank spent Rs. 95.80 crore on various projects/ activities under CSR during 2014-15 to 2017-18 but nearly 49% of that amount was spent on activities that served elite or was out of the ambit of CSR.
Following deficiencies were noticed in spending of CSR fund by the Bank:
Expenditure on re-development of Kashmir Golf Course out of CSR fund
Bank incurred an expenditure amounting to Rs. 39.17 crore during 2015-16 to 2017-18 on re-development of Kashmir Golf Course in contravention of the Bank’s CSR policy, which focuses on upliftment of the marginalized and under-privileged sections of the society. Audit observed that redevelopment of golf course under CSR activities was approved by the Board without the same being placed before the CSR Committee of the Board, thereby deviating from Bank’s CSR policy.
Management of J&K Bank in December 201 informed Audit that floods in 2014 damaged the Golf Course and the Bank as a conscious corporate took up its re-development under CSR. Audit observed that since Bank’s CSR policy focuses on upliftment of the marginalized and under-privileged sections of the society, the expenditure on re-development of golf course, which is a preserve of the elite, was not in order. Further, the expenditure on Golf Course during 2016-18 constituted 47.73 per cent of the total funds spent under CSR activities by the Bank during this period.
Expenditure on Amusement Park, Pahalgam
Bank incurred an expenditure of Rs. 6.28 crore on Amusement Park, Pahalgam under the segment ‘Ecology/ Environment’ during 2015-16 to 2017-18. Audit said that amusement park is entertainment spot and expenditure thereon was not related with ecology & environment activities. This was done, according to Bank sources on the insistence of a top PDP leader when the PDP-BJP government was in office and Mehbooba Mufti was Chief Minister.
Expenditure on printing of Ration Cards issued by State Government
The Bank incurred an expenditure of Rs. 1.51 crore out of CSR funds, on printing of Ration Cards (RCs) issued by State Government during 2015-16, despite the same being responsibility of State Government, for which cost was charged from beneficiaries.
Beyond the scope of its policy
CSR Policy of the Bank stipulates that it shall spend a maximum of 15 per cent of the prescribed CSR budget for a single activity/ project and not more than 35 per cent in a single segment. Audit, however, observed, that in contravention to its CSR Policy, the Bank had spent 53.09 per cent and 83.82 per cent on a single activity/ project (Kashmir Golf Course Development) during 2016-17 and 2017-18, respectively. Further, the Bank had spent 49.33 per cent, 75.99 per cent and 95.27 per cent under a single segment (Ecology and Environment) during 2015-16, 2016-17 and 2017-18, respectively.
Management’s Response
The Management replied (December 2018) to the Audit that CSR is a Board level activity and all the decisions regarding CSR activities/ programs remain in the knowledge of the Board. Accordingly, deviations for segment/ project approvals are exercised by the Board within the purview of its powers. The audit, however, observed that reply of the Management is not tenable as the Board was not apprised of the fact that the expenditure on the particular activity/ program exceeded the threshold fixed under the CSR policy.
