This is reference to an article appearing in Business Recorder yesterday which contains some serious incorrect statements attributed to KASB Bank. While inaccuracies are substantial in number, the factual position with respect to only some key points are explained below.
1) Since KASB Bank Limited is not a natural person, it can only interact with media through either written organizational press release or statement by any of its authorized officer; however no such information is given in the article. This serious omission indicates that other malicious actors and vested interest are at play here, who do not want to come in picture themselves and whose main aim is to cause harm to over 150,000 depositors of KASB Bank Limited.
2) The article refers to some stance of MoF, whereas it is the State Bank which, being the sole regulator of banking sector is responsible for effective resolution of any problem bank. State Bank has already conveyed its stance to the Public through various press releases and interaction with the media. The primary objectives remain to be a) safeguarding the interest of bank depositors and b) stability of banking system; and SBP will take all legally available measures to achieve the same. If any legal action requires Government of Pakistan (GOP) approval, State Bank seeks it accordingly from MOF.
3) Both SBP and GOP are committed to provide conducive environment for Foreign Direct Investment from all countries including our brotherly country of China. To suggest that SBP, MoF or any other GOP body would take any action to jeopardize this commitment is absolutely wrong. The banking sector has attracted FDIs from reputed entities like ICBC Bank from China, Dubai Islamic Bank from UAE, MayBank from Malaysia, SAMBA Bank from Saudi Arabia etc. For banking sector FDI, State Bank is the frontline authority to conduct due diligence and once SBP gives a go ahead other relevant Government bodies/ Ministries process the investment.
4) As far as the Financial Statements of KASB Bank for the year 2014 are concerned, perhaps for the first time in Pakistan''s banking history, a bank''s own auditors have refused to give an opinion about its accounts. They have put on record that they were not given complete information by KASB Bank. Given this disclaimer of audit firm, the Financial Statements for 2014 of KASB Bank are no longer authentic, and it is misleading to quote profit and equity figures from the same. In fact, the accounts reveal that Board and management have tried to sneak in dubious entries to jack up yearly results. State Bank has already instructed the bank to fully address auditors'' concerns so that they could express opinion on the financial statements instead of giving disclaimer.
5) The entire narration about alleged Chinese investor is riddled with blatant lies and half truths. State Bank of Pakistan has given ample opportunity to the potential investor to submit their credentials and asked them to commit substantial funds upfront within a given timeline, to enable SBP to carry out its assessments for fitness & propriety. The non-seriousness of the potential investor can be gauged from the fact that even the persons claiming to be from China were not able to provide their own identification papers let alone that of beneficial owners or firms. Given the serious condition of the bank and hardship to the depositors State Bank cannot provide unlimited time to any so called potential investor.
6) The article referred to concerns about the employees of the KASB Bank as well which is unfounded. In the merger scheme being proposed, the State Bank has categorically addressed this issue, and has provided that upon execution of merger, all employees of KASB Bank will become employees of merged banks.
It is important to note that SBP''s efforts towards effective resolution of banks cause problems for unscrupulous people who take advantage of depositors'' money and use it for their own vested interests and private businesses. State Bank would like to convey to the general public particularly to the account holders of KASB Bank Limited that it will do everything under its mandate to protect the hard earned funds of the depositors and to give confidence in the system to maintain financial stability.-PR