KARACHI, Aug 17: First Women Bank (FWB) has failed to meet the minimum requirement for paid-up capital but has succeeded in getting another extension of six months to achieve the target.

Sources in the banking industry said that the FWB had been awarded more time to reach the target which now looks impossible for it.

The State Bank had made it compulsory for all commercial banks to raise their paid-up capital to Rs2bn by December 31, 2005 and to Rs3bn by December 31, 2006. The deadline had been extended for the FWB to June 30, 2006 but it had failed to raise its capital to Rs2 billion.

“Now the State Bank has again extended the deadline for minimum requirement till December 31, 2006,” said a banking source.

However, the FWB will find it more difficult to meet the requirement as the target has been further increased to Rs3 billion

Sources said that the extension was given with backing of the federal government which did not want to see failure of the only women bank in the country.

“The State Bank has been encouraging small banks to merge or sell it to bigger financial institutions but in the case of women bank basic requirement of paid-up capital is being ignored,” said a banker.

The state-owned FWB was incorporated in 1989 and commenced operation the same year.

The bank posted profit after tax of Rs133.601 million in the year 2005 as compared to Rs124.324 million in 2004.

The year 2004 and 2005 have been the most profitable years for the banking industry and most of the banks earned record profits, however, the performance of the FWB remained poor and it failed to meet the requirement of minimum paid-up capital.

Many bankers said that the survival of the only women bank was difficult as it would have to pack up before the end of the current year. They said there was no hope for any improvement in its financial position. The main stakeholders of the bank are five big banks excluding the National Bank of Pakistan.

State Bank Governor Dr Shamshad Akhtar had recently hinted that the FWB could be sold out. The bank has only 38 branches all over the country as it had not been able to expand its network since 2002.