JHARKHAND STATE COOPERATIVE BANK LTD
EXCELS IN NPA MANAGEMENT
RATED INDIA INVOLVED BY SKOCH

Over the past few years, the Jharkhand State Cooperative Bank (JSCB) has transformed itself from a struggling institution with overwhelming non-performing assets (NPAs) into a model of cooperative banking reform. Through an unwavering commitment to recovery, accountability and modernisation, JSCB not only reversed years of financial stress but also emerged as a digitally resilient bank equipped with cutting-edge cybersecurity architecture. Its dual success in NPA management and the implementation of a Unified Security Solution has reshaped both the bank’s financial health and its digital future.

Reviving Financial Discipline

In 2020, JSCB faced an alarming situation — the Gross Non-Performing Asset (GNPA) ratio stood at an unsustainable 51.63%, while the Net NPA (NNPA) was 18.48%. The situation posed a serious regulatory risk; the Reserve Bank of India and NABARD could have initiated statutory actions if the ratio was not brought below 10%. Recognising the existential threat, the bank embarked on a mission to restore financial discipline.

The first challenge was to address years of poor recovery performance and low staff motivation. The management introduced a structured recovery framework beginning in April 2020. Recovery teams were formed at each regional office, bolstered by the assistance of government home guards to support field enforcement. The bank initiated extensive legal action under Section 138 of the Negotiable Instruments Act against willful defaulters, while also pursuing certificate cases to enforce repayment orders.

Simultaneously, JSCB partnered with district administrations to strengthen the powers of Certificate Officers in key districts like Deoghar, Dumka, Simdega, East Singhbhum and Gumla, ensuring faster enforcement. Eligible cases were settled through Lok Adalats, encouraging voluntary repayments and minimising litigation delays. Monthly review meetings, led by the top management, created an environment of accountability and motivation, turning recovery into an organisational priority.

The impact was dramatic. By March 2025, the GNPA had fallen to 9.53% and NNPA had dropped to 3.15%— a sharp reduction of more than forty percentage points in five years. Beyond the numbers, the project instilled a culture of quality lending, regular monitoring and legal vigilance. Borrowers were re-engaged with renewed seriousness, while staff developed a sense of ownership toward recovery goals.

The key to this turnaround lay in a combination of strong leadership, consistent follow-up and the use of legal instruments backed by administrative support. It was not merely a recovery drive — it was an institutional renewal.

The Unified Security Solution

As JSCB’s financial position stabilised, attention shifted toward securing its growing digital ecosystem. With expanding customer bases, digital transactions and internet banking, the bank recognised that cybersecurity had to be at the heart of its modernisation journey. In July 2024, it launched the Unified Security Solution, a project that combined multiple advanced technologies under one architecture to protect data, networks and operations.

The system integrated Managed Detection and Response (MDR) with Artificial Intelligence (AI) and Machine Learning (ML) capabilities, along with Extended Detection and Response (XDR), XSOAR and Next-Generation Firewalls. All these layers were interconnected through a Security Operations Centre (SOC), enabling real-time monitoring, automatic incident generation and proactive responses to emerging threats.

The security solution ensured protection across all endpoints — desktops, laptops and servers — against malware, phishing and exploitation attempts. During its phased rollout from concept to implementation (2023–2025), the bank overcame challenges such as integrating different technologies, aligning compliance mandates and maintaining efficiency without disrupting services.

The new architecture empowered JSCB with automated playbooks for incident handling through XSOAR integration with Active Directory and firewall systems. It also brought live monitoring of all network activities, ensuring that any breach attempt was detected and contained instantly. The result was a seamless, unified and automated cybersecurity environment.

The initiative led to measurable outcomes: improved threat detection and response time, enhanced protection of financial transactions and stronger compliance with national cybersecurity standards. Importantly, the project was cost-effective, scalable and designed to be replicable across cooperative banking networks in India.

Sustainable and Secure Cooperative Banking Model

Both initiatives — NPA management and cybersecurity modernisation — reflect JSCB’s determination to build a resilient institution rooted in accountability and innovation. The lessons learned from NPA reduction underscore the importance of employee motivation, quality lending and systematic legal action, while the cybersecurity transformation highlights technological foresight and proactive governance.

Through the NPA project, JSCB regained its financial footing; through the Unified Security Solution, it fortified its digital backbone. Together, these efforts signify a complete institutional evolution — from financial recovery to technological maturity.