ISLAMABAD: Not satisfied with the State Bank of Pakistan’s (SBP) Governor report, the Senate Standing Committee on Finance o directed the State Bank to submit all the official record about the moratorium and merger of KASB Bank with the Bank Islami for their perusal and decision. The meeting of the Senate Standing Committee on Finance was chaired by Saleem Mandviwala.
The committee was given briefing by SBP Governor Ashraf Wathra on the closure of the KASB Bank. He said the government provided a bailout package worth of Rs 75 billion to six Pakistani banks in 2009 in which KASB Bank was included. He said the Summit Bank, Silk Bank and Bank of Punjab availed the opportunity to turn profitable while KASB Bank last year had a loss of Rs 12.5 billion.
The SBP governor said that 14 agreements were signed with the KASB Bank to bring it out of the financial quagmire but its management failed to fulfil the commitments. He said four banks including Askari Bank, Sindh Bank, JS Bank and Bank Islami showed interest to acquire the bank.
He said there was no need to advertise selling of KASB Bank, as he claimed that the merger of banks was normal practice worldwide and in the last 10 years many Pakistani banks had been amalgamated.
However, Senator Saeed Ghani stressed for presenting the official documents and minutes of the meetings on the sale of the bank, and opinion of the law ministry to establish that the central bank acted in a fair and transparent manner. In his opinion, he said, the National Bank of Pakistan would have been a better choice for the merger of KASB Bank.
Senator Mohammad Ali Saif said it was a strange case as it was beyond comprehension why the KASB Bank decided to take back its case from the high court. Senator Islamuddin Sheikh said the bank was sold by SBP on the pressure of an influential person.
The SBP governor tried his best to assure the committee that the central bank did follow all the procedure as per the rules. However, it was overruled. The committee directed that all the documents containing regulatory orders on moratorium to the merger of the KASB Bank should be placed before it. The committee also decided to call the mandarins of the finance ministry and other stakeholders in next meeting to listen to their opinion about the issue.
