On SBP advice: Government takes over KASB Bank

Senior government official says KASB falling short of capital adequacy ratio by Rs6 billion

ISLAMABAD:

The government seized control of KASB Bank on Friday when its owners could not meet the minimum capital requirements.

The government also cancelled all the contracts of KASB Securities, where it was a leading partner in consortiums of financial advisers hired for privatisation transactions, including divestment of stakes in Habib Bank Limited.

“In order to protect the interest of depositors and other stakeholders and due to financial health and other circumstances of KASB Bank Limited, the federal government has placed KASB Bank Limited under moratorium for a period of six months with effect from close of business as of November 14, 2014,” said a statement issued by State Bank of Pakistan (SBP).

A senior government official said KASB was falling short of capital adequacy ratio by Rs6 billion. The government took the step on the advice of the SBP. It has suspended all kinds of payments from the bank but allowed the account holders having up to Rs300,000 balance to withdraw their amounts.

Published in The Express Tribune, November 15^th, 2014.