KARACHI: The State Bank of Pakistan on Friday gave its consent on the Sindh government’s plans to establish the Sindh Bank Limited, Pakistan Today has learnt. According to well placed sources, the central bank nodded to the setting up of the public sector entity after the provincial government fulfilled all regulatory requirements.
At the end of October, the Ministry of Finance and the SBP had approved, in principle, the formation of the SBL. It would, in the eyes of the provincial government, mainly focus on the agriculture sector of the flood blighted province. However, the central bank had explicitly linked the issuance of a license to the implementation of all regulatory formalities on the part of the provincial government.
When contacted, State Bank Chief Spokesman Syed Wasimuddin confirmed to Pakistan Today that, “the license has been issued; they (the Sindh government) have addressed all our regulatory requirements.” The apex regulator of the banks requires applicants to fulfill its “fit and proper test” (FPT) criteria, under which the central bank assesses fitness and merit of all financial institutions on the basis of integrity, reputation, track record, solvency, qualification, experience and any potential clash of interest likely to arise.
Basic FPT requirements entail the registration of the proposed bank with the Securities and Exchange Commission of Pakistan (SECP) as a company and a minimum capital requirement (MCR) of Rs 10 billion. Sources indicated that the Sindh government had not only met MCR requirements, but had also formed a seven-member Board of Directors of the provincial bank. Sources revealed that Muhammad Bilal Sheikh would be tapped as Chief Executive Officer (CEO) of the SBL. The Board would comprise three representatives from the public and private sectors each. Sources were also convinced that chief secretary Sindh, additional chief secretary Sindh and the secretary finance would be the public servants placed at the helm.
It also seemed likely that those appointed from the private sector would include businessmen like Javed Mehmood, Wazir Ali Khwaja and Abdul Wahab, they added. Earlier in a telephonic conversation, SECP Spokesman Shakil Ahmed had told Pakistan Today that the Sindh government had approached the apex regulator for availability of a suitable name. He confirmed that the SECP had cleared ‘Sindh Bank Limited’ as a proposed name for the new bank. The Sindh government, in a May 25, 2010 meeting of the revenue department held under the chairmanship of Chief Minister Qaim Ali Shah, had approved the establishment of Sindh Bank.
