Living in Pakistan, we are addicted to news related to corruption by higher authorities. But this one has literally widened the eyes open for many people. A bank with 105 branches getting sold for Rs. 1,000 only. Wow!!! 😮 😮 😮 Well, certainly these were my remarks too when I saw the news. We are talking about KASB Bank which got sold to Bank Islami recently.
According to further details, Bank KASB was sold for Rs. 1,000 to Bank Islami along with Rs. 25 Arab as ‘Gift’. On 7th May 2015, the bank was merged in to Bank Islami and the price of its assets was set to be Rs. 1,000. State Bank of Pakistan first gave a loan of Rs. 10 Arab for ten years at only 0.1% interest rate to Bank Islami to run the operations of the bank. Later on, it was further granted Rs. 15 Arab making the total amount to Rs. 25 Arab for Rs. 1,000 only. KASB Bank was having over 9,000 shares having worth of Rs. 1 Arab 95 Crores. But once it got sold for Rs. 1,000, the cost of these shares became ZERO. The shareholders of the bank lost their investment in no time. The deal completely benefitted the Bank Islami whom shares now costs Rs. 12.5 per share (50 percent more than that was before the deal). Following was the value of the assets held by KASB Bank at the time of deal:
The whole incident got started when the State Bank imposed financial restrictions on KASB Bank on 14th November 2015 due to low regulatory assets. At that time, four more banks including Bank Islami have got low regulator assets. However, only KASB Bank was targeted. Security Exchange Commission of Pakistan (SECP) played no role and remained silence on the issue.
This has raised serious questions regarding the authenticity of the deal. The issue was first lifted by popular anchor Kamran Khan on Dunya News. Now, it is been highlighted on almost every media channel due to its seriousness.
Well, we can see such cases only in Pakistan. We can only hope for right investigations on the issue. What are your thoughts on this whole scenario? Share your views in comments section below.