KARACHI: The State Bank of Pakistan (SBP) has clarified that the request to buy KASB Bank by a Chinese company was refused due to its low investment capacity.
The central bank has to face criticism, when it turned down a Chinese company’s offer of acquiring the Khadim Ali Shah Bokhari (KASB) Bank, despite huge investment agreements signed between Beijing and Islamabad.
SBP spokesman Abid Qamar said, “The Chinese company taking interest in the KASB Bank was not ready to provide sufficient information about their balance-sheet while the offer was also meagre.”
The SBP said the KASB Bank had been facing severe capital shortfall in terms of both Minimum Capital Requirement (MCR) and Capital Adequacy Ratio (CAR) since 2009. As of Sept 30, 2014 the bank MCR (free of losses) was in the amount of Rs0.958 billion with a CAR of negative 4.63 per cent against the required levels of Rs10bn and 10pc, respectively.
However, neither the capital was injected by sponsors, nor any serious effort was made to resolve the problem, said the SBP, adding that the KASB Bank failed to comply with the limitations imposed by SBP.
According to SBP, four banks, including Askari Bank, Sindh Bank, JS Bank and BankIslami, approached for due diligence and BankIslami remained in the field to acquire the KASB Bank.
