4, April 2005	Monday	24 Safar 1426

Please Visit our Sponsor (Ads open in separate window).

PESHAWAR, April 3: The State Bank of Pakistan has not allowed the Bank of Khyber to convert its Nowshera branch into an Islamic banking branch because of its weak financial health, sources said.

The sources said that in a letter to the central bank on Dec 24 the Bank of Khyber had sought permission to convert its Nowshera branch into an Islamic banking branch. The SBP refused to grant permission because of the poor financial health of the bank.

“Due to serious management issues and adverse rating of Bank of Khyber, your request for conversion of Nowshera branch into Islamic banking branch has not been acceded to by the competent authority,” contained the official communiqué sent to the Bank of Khyber in response to its Dec 24 request for the permission.

The management of the Bank has been informed that the request for permission has been put in pending till findings of the next report by the SBP’s banking inspection department.

The sources said that the SBP turned down the request on the basis of an inspection conducted under which concerns had been expressed viz-a-viz managerial flaws and involvement of certain non-banking staff in the affairs of the bank.

“After the inspection team pinpointed (in its report) the involvement of Mohammed Asghar, a political appointee of provincial finance minister Sirajul Haq, in the affairs of BoK, his role has been curtailed considerably,” said a well placed officer of the NWFP planning and development department.

Meanwhile, the provincial finance department appears to be in a difficult position after its efforts to replace the existing managing director of BoK have apparently been blocked by Chief Minister Akram Khan Durrani.

The sitting managing director of BoK, Dr Munir Ahmed Khan, had tendered his resignation in the first week of January after the SBP’s inspection report pinpointed several management issues which were directly pertained to him.

In the light of his resignation, the provincial finance department invited applications, through newspaper advertisement, for the office of the managing director.

“The move has apparently been put at halt because of the silence adopted by the chief minister who has not responded to the case of appointing new MD for the BoK. And applications had been forwarded to him after being processed by the finance department,” said an official source.

The official said that while the sitting MD was supposed to leave the office at the completion of a three-month grace period following the acceptance of his resignation, he was still regularly attending the office and discharging his official role.

The situation, said the sources, had put the finance department in a difficult position as confusion prevailed about the process of selecting the new MD.