KARACHI: State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra said on Monday the criterion for Pakistan Banking Awards 2017 should include the geographical distribution of banks’ loans and deposits to promote financial inclusion.

Speaking at the launch of the second edition of Pakistan Banking Awards at the Institute of Bankers Pakistan (IBP), Mr Wathra said banks should be rewarded for expanding their footprint in neglected areas, such as Balochistan, Khyber Pakhtunkhwa, Gilgit-Baltistan, Federally Administered Tribal Areas and Provincially Administered Tribal Areas along with remote parts of Sindh and Punjab.

Pakistan Banking Awards, which started in 2016, are given to individual banks based on their performance in the developmental, financial and customer service spheres. Their eight categories are Bank the Unbanked Award, Best Microfinance Bank, Best Bank for Small Businesses and Agriculture, Best Bank for Corporate Finance and Capital Market Development, Best Customer Franchise, Best Islamic Bank, Best Environmental, Social and Governance (ESG) Bank and, lastly, the Best Bank of the Year. United Bank won in the best bank category in 2016.

Launches second edition of Pakistan Banking Awards

Mr Wathra said the central bank has introduced a number of concessionary schemes in priority areas, particularly exports. “But banks don’t promote those schemes. They have failed to create awareness among their clients,” he said, adding that the awards should take into account how actively a bank promotes the SBP’s concessionary schemes.

The IBP, Dawn Media Group and accountancy firm A.F. Ferguson and Company are organising the awards. Dawn Media Group CEO Hameed Haroon said these awards should not be considered Dawn Banking Awards. “Dawn is only a facilitator. It is extending communication expertise only,” he said.

A.F. Ferguson and Company Partner Syed Faraz Anwar said the awards already assign a higher weight to banks that have larger presence in neglected geographical areas. However, he assured the SBP governor that the relevant committee will look into the possibility of increasing the weight assigned to this performance indicator.

Criticism

Habib Bank President Nauman K. Dar said the criterion for the Best Bank for Corporate Finance and Capital Market Development is “not in sync with” the actual practice of investment banking in Pakistan. The SBP governor agreed with Mr Dar’s observation and asked the IBP and A.F. Ferguson and Company to take into account a bank’s contribution to project financing in relation to its total assets.

NBP President Saeed Ahmad said some banks are poised to beat others by virtue of their size. As an example, he said no institution can compete with Meezan Bank in the Shariah-compliant category. Similarly, only a handful of banks qualify for the investment bank category, he said. “The awards should not be given based on what already exists. Instead, banks should be rewarded for the improvements that they make over the year,” he added.

Mr Anwar of A.F. Ferguson and Company said the size of a bank is not the only criterion as key ratios will determine if the institution is actually worth an award. For example, the award in the SME category will take into account a bank’s loans to start-ups as a percentage of its total advances.

Many banks did not fill their nomination forms diligently in 2016, which reduced their chances of winning, the SBP governor said. He asked IBP CEO Hussain Lawai to hold a working session for those bank personnel who are supposed to fill the nomination forms.

Mr Lawai said banks’ chief financial officers will sign the nomination forms this year to ensure that the information is up-to-date. The IBP will bear the cost of the awards ceremony without accepting contributions from banks to avoid any conflict of interest.

Jury members include SBP former governor Syed Salim Raza, former banking ombudsman Azhar Hamid, Pakistan Institute of Corporate Governance CEO Feroz Rizvi, English Biscuit Manufacturers CEO Dr Zeelaf Munir and former regional head of Citibank Middle East and Pakistan Shehzad Naqvi.

Published in Dawn, March 28th, 2017