The State Bank of Pakistan (SBP) Thursday approved the amalgamation of KASB Bank Limited and Bank Islami Pakistan Limited.
The central bank in a statement informed the depositors of KASB Bank Limited (“the bank”) that scheme of amalgamation of the bank has been approved by the federal government.
“In terms of the amalgamation scheme, KASB Bank Limited has been merged with and into BankIslami Pakistan Limited,” the SBP said.
Accordingly, the moratorium placed on former KASB Bank Limited has been lifted with immediate effect. The depositors of former KASB Bank Limited are now depositors of BankIslami Pakistan Limited and are free to operate their accounts maintained at the respective branches of the former KASB Bank Limited as per their convenience.
The SBP acknowledges the patience shown by the depositors of the former KASB Bank Limited as well as their confidence on the regulator during moratorium period.
The SBP reiterates its commitment to safeguard the interests of depositors and to ensure safety and soundness of the banking system of the country.
KASB Bank lacked capital adequacy, which led the federal government to impose a six-month moratorium on last November in order to allow the SBP to prepare a scheme for either the reconstruction of the banking company or its amalgamation with ‘any other banking institution’.
With a branch network of 105 branches, KASB Bank’s total equity at the end of the last year was only Rs 1.3 billion, KASB Banks annual report said.
In contrast, Bank Islami had 213 branches at the end of 2014 with total equity of Rs 6.2 billion. Its profit after tax for 2014 was Rs 313.6 million, up 69.3% from the preceding year’s earnings.
