Sindh Bank awarded formal status

State Bank of Pakistan declares Sindh Bank Limited a scheduled bank with effect from December 24.

KARACHI:

The State Bank of Pakistan (SBP) has declared Sindh Bank Limited a scheduled bank with effect from December 24, according to a notification issued by the central bank’s banking policy and regulations department.

“This means the bank can now commence business and open branches,” said SBP spokesperson Syed Wasimuddin. He, however, did not comment on when Sindh Bank planned to formally start operations in the country.

A government official had earlier said that three branches of the bank would be set up by December 25 in Karachi, Hyderabad and Larkana. Industry sources, however, say that the first branch of the bank will be established in Naudero.

“The basic objective of the bank is to increase participation in rural Sindh,” commented Standard Capital Securities Research Head Faisal Shaji. Terming small and medium enterprises the engine of the economy, he said that the bank aimed to provide microfinance facilities in areas where access to credit was limited.

But he was quick to point out that accountability and efficiency remained key concerns. “Microfinance has become a cliché.” Elaborating, he said that in terms of finances specialised banks like the SME Bank and First Women Bank have not been very successful in the country.

“Besides, as we have seen with the National Bank write-offs, the landed elite in the areas Sindh Bank plans to focus on does not have a very good track record of paying back.”

Giving the example of the State Bank’s export refinance scheme that was backed by the Asian Development Bank, he linked the success of the bank to multilateral funding.

Nonetheless, Shaji pinned hopes of the bank’s success on the public-private partnership. The board of directors of Sindh Bank comprises the board’s president Bilal Sheikh, Abdul Wahab, Javed Mehmood and Wazir Ali Khoja from the private sector, while the chief secretary of Sindh, the additional chief secretary and the secretary for finance represent the public sector.

Published in The Express Tribune, December 25th, 2010.