January 24, 2006	Tuesday	Zilhaj 23, 1426

KARACHI, Jan 23: The entire database of top five banks has been brought under direct access of the State Bank despite resistance from these commercial banks.

However, the banks are willing to raise the issue with the newly-appointed SBP Governor, Dr Shamshad Akhtar.

Sources said that Muslim Commercial Bank (MCB), which was yet not touched, had also been approached and its entire database was taken by the SBP.

Banking sources said that despite major reforms in the banking sector, the State Bank never tried to acquire entire data of a bank. Banks said that the second generation reforms were under implementation which was the direct result of the first generation reforms and the confidence of the SBP on the banking industry.

The new development, which emerged after the retirement of SBP former governor Dr Ishrat Husain, has produced significant level of resistance and dismay in the banking industry.

The SBP for the first time got access to database of banks in the first week of this month enabling it to get in-depth knowledge about any bank.

Bankers argued that the direct access to their entire database might hurt their business secret. Sources said that all banks would be approached to get their complete data. They said that five big banks — Habib Bank, National Bank, Allied Bank, United Bank and MCB — were taken first because of their largest collective share in the banking industry.

Despite having serious reservations on the SBP move, the banks were not ready to comment on the situation.

Some bankers said that there should be no fear as the in-depth data study would produce a more transparent picture of the banks. However, others said it would hurt their business as they feared that some business secrets might pass on to those who could get undue advantage.

The SBP used to inspect these banks with sample data which had chances to escape some important factors, but now it would not be possible.

They said that the issue would be raised with the SBP governor in the very first meeting with the banks. They said that the issue would gain more weight if more banks were approached for access to their database.

Analysts of brokerage houses found the SBP move very helpful and believed that the SBP report would provide clearer picture of a bank and trading in the bourses would be easier and less risky.

They felt that the move was appreciable and the SBP should involve entire banking industry for filtration of database. However, they proposed that the SBP report should be made public to help investors while making investment in the banking sector.

One of the most important aspects is the flirtation of information about the money laundering. There has been pressure on Pakistan by the United States to check the money laundering minutely, however, Pakistani banks were never found involved in money laundering.

Banks said that they were not informed about the purpose of the SBP move.