National Bank of Pakistan: NAB may probe Rs14b losses at Bangladesh branch

NA panel pondering move on fears the bank is protecting the accused.


Our Correspondent January 06, 2015
It was reported in The Express Tribune in January last year that NBP’s Bangladesh operations sustained a loss of over Rs11 billion and the management was trying to protect the accused. STOCK IMAGE

ISLAMABAD: A case involving losses of Rs13.9 billion in the Bangladesh branch of National Bank of Pakistan (NBP) will be sent to the National Accountability Bureau (NAB) for investigation on apprehensions that the bank management is protecting the officials accused of negligence.

National Assembly Standing Committee on Finance and Revenue Chairman Omar Ayub Khan dropped the hint while presiding over a meeting of the body here on Tuesday.

Khan said a sub-committee constituted by him to fix responsibility may recommend the case to NAB for initiating a probe, regretting that the NBP management was not cooperating with the standing committee.

“I don’t know why the management is dragging its feet,” remarked a visibly perturbed chairman, who was not happy with the lack of cooperation from the bank’s high-ups.

Sub-committee Convener MNA Qaiser Sheikh complained that in the last meeting the NBP management presented an inquiry report at the eleventh hour, which did not give enough time to the body to go through the findings in order to hold accountable the officials responsible for causing the losses. Sheikh pointed out that NBP President Iqbal Ashraf had promised to proceed against the accused and submit a report to the standing committee, but it had not yet been presented.

Ayub asked the convener to call another meeting and seek more details of the case from the bank before recommending any action.

It was reported in The Express Tribune in January last year that NBP’s Bangladesh operations sustained a loss of over Rs11 billion and the management was trying to protect the accused.

The accused involved 26 top officials of the bank including seven Bangladeshi nationals, four Pakistanis working in Dhaka and four Pakistanis deputed at the NBP regional headquarters in Bahrain and directly responsible for Bangladesh operations.

There were apprehensions that the management was trying to protect Zubair Ahmed, Rifiq Bengali and Jehanzaib Khan. The bank has also not come up with a workable recovery plan. In order to meet liquidity requirements that fell short of statutory obligations due to the Rs14-billion losses, the Economic Coordination Committee of the cabinet last month approved an injection of $65 million into the Bangladesh branch.

HBFC under the spotlight

The standing committee also reviewed the financial affairs of state-owned House Building Finance Company (HBFC).

The best man, in the eyes of the Ministry of Finance which it picked to restructure HBFC, could not impress the committee. The presentation given by Pervez Said, Managing Director of HBFC, fell short of expectations on many accounts.

The committee expressed its dissatisfaction over the HBFC affairs and asked the management to come in the next meeting with necessary preparation.

According to the managing director, outstanding non-performing loans of the financial institution stood at Rs5.6 billion and only half of the bad loans were covered. Its total equity was Rs3.2 billion, way below the minimum level of Rs6 billion required for a development finance institution.

The management presented confusing figures about the current capital and reserves position of the entity.

Finance Secretary Dr Waqar Masood told the committee that the State Bank of Pakistan was concerned about HBFC’s failure to meet the refinancing cost and had called for an objective assessment of the institution’s lending portfolio.

Published in The Express Tribune, January 7th,  2015.

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COMMENTS (1)

Timorlane | 9 years ago | Reply

Probe and then nothing

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