PESHAWAR, Dec 15: NWFP government’s decision to invest Rs250m as equity in the provincial public sector Bank of Khyber helped it (BoK) to fulfil the State Bank Rs750m paid-up capital limit - that was required to be touched by December 31, 2001, official sources told Dawn here on Saturday.

In a recently held meeting, the provincial cabinet sanctioned investment of Rs250m as equity in BoK raising the NWFP government’s equity share in the provincial public sector bank to Rs652.5m - out of a total of Rs750m.

According to the sources, in line with the central bank’s requirements BoK was supposed to have a total of Rs750m paid up capital with the State Bank by Dec 31, 2001.

The provincial government’s timely decision, said the sources, helped the bank to avoid punitive action on the part of the State Bank.

In case of failure to touch the Rs750m paid up capital benchmark, the BoK could have lost the status of a schedule bank. “There was every likelihood that BoK may well have lost status of schedule bank in case of its failure to accomplish the Rs750m deposits with the State Bank,” said well-placed sources.

Apart from the government of NWFP, DEG — a German lending agency — is the other equity shareholder in BoK.

Out of the total Rs750m equity, the DEG’s equity share comes to Rs97.5m.

During the next one year, according to the sources, the BoK would need another Rs250m equity investment to accomplish yet an other paid up capital benchmark the central bank has set for the BoK.

According to the sources, by the year 2003 the Bank is required to have a total of Rs1bn paid up capital with the State Bank.