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The State Bank of Pakistan feels that under the current circumstances, the merger of KASB Bank with Banklslami isa viable option wherein the bank's depositors' interest would be safeguarded and its problem would be resolved on a workable and sustainable basis.
Although there was a rumor Chinese investment worth $100 million being made available by May 13, this is deemed to be insufficient taking into account the quantum of deposits (in this case Rs57 billion of more than 150,000 depositors) of the bank and the Minimum Capital Requirement. Further, the prospective investor has not as yet declared any information regarding the sourcing of these funds. The State Bank of Pakistan, always welcoming Foreign Direct investment, insists that any investments must be within the prevailing bounds of laws and regulations.
The priority for the State Bank is the safety of depositors' money and prompt repayments to them, simultaneously, SBP does not want to fall in any conflict with the shareholders neither was its intention at the time of placing the moratorium. The Chinese investor group, Cybernaut investment Group (CIG), was unable to establish a bonafide profile in spite of a reasonable time limit to do and as such, their request was declined on 27th April 2015.
The identity of CIG was first raised, after filing the writ petition against SBP in the IHC (Islamabad High court) that first stalled the resolution process, Mr. Nasir Ali shah Bukhari (NASB) vide letter dated February 24, 2015, and March 2, 2015 informed SBP that they have identified the investor namely Cybernaut Investment Group (CIG) and requested for a due diligence approval.
Receipt of a formal request through K-Corp, the SBP had formally requested for detailed information on the group to establish the good standing of CIG, which was not provided and consequently resulting in their request for a formal due diligence being declined.
However, in view of the gravity of the situation and to protect the interest of the depositors they were offered to share relevant information along with arrangements of funds of Rs5 billion within a week on 10th March 2015. CIG did not comply and KASB filed a contempt application before the Islamabad High Court.
During a subsequent meeting called by CIG with the SBP on...