After a three-year lull, the government has moved forward to withdraw existing shares of state-run Rupali Bank from Pakistan-based Summit Bank, officials said.
To this effect, they said, a high-powered committee formed by Rupali Bank will visit Pakistan soon.
When contacted, deputy managing director of Rupali Bank Hasne Alam said, "A four-member team will go to Pakistan soon for selling our shares in Summit Bank."
He added: "In this connection, we have sent a letter to the finance ministry for approval. We will have to get permission from the State Bank of Pakistan and Securities and Exchange Commission of Pakistan for selling the existing shares."
"The State Bank of Pakistan is very slow. We have some funds in our account. But we are yet to bring back the funds from that country due to lack of required response from the regulatory authorities despite repeated attempts," said Mr Alam, also chief of the committee.
A senior official of Rupali Bank said, "There has been no development even after a change in the management of the Pakistani bank."
Officials concerned said the government in March 2015 took decision to sell 1.84 per cent or 32.77 million shares of Rupali Bank in the Pakistani bank.
To this effect, the board of directors of Rupali Bank formed a four-member high-powered committee to withdraw shares and realise all dues from Summit Bank.
The committee was formed with representatives from the finance ministry, foreign ministry, Bangladesh Bank and a deputy managing director of Rupali Bank.
When contacted, a senior official of the bank said, "Neither are we gaining little benefit from Summit Bank nor is there any positive prospect for the same. So, we have decided to sell out our existing shares."
In 2008, Summit Bank issued 3.27 million bonus shares in favour of Rupali Bank. Currently, the Pakistani bank owes over PKR 16.3 million to Rupali Bank as mentioned in the Pakistani bank's balance sheet, he said.
"We have pursued many times through e-mail and over telephone for providing our dues. But the bank authority mentioned reference to the state bank of Pakistan," he mentioned.
"Presently, the price of the bank's shares is much lower than face value. We are waiting for an increase in the price of shares," the deputy managing director told reporters in December last.
Rupali Bank holds 1.84 per cent shares in the Pakistani bank. Some 32.77 million out of total shares of the Pak bank are held by Rupali Bank. Face value of each share is PKR 10. Market price of per share is hovering between PKR 2.37 and PKR 2.45, according to a source in the Financial Institutions Division under the finance ministry.
According to annual report 2016 of Summit Bank, ''During the year, the bank posted loss after tax of Rs. 2,174.39 million as compared to the profit after tax of Rs. 217.22 million last year."
According to a quarterly report ended in September 2017, during the nine-month period under review, the bank posted a loss after tax of Rs. 427.78 million as compared to the loss after tax of Rs. 1275.70 million during the corresponding period.
In October 2007, Arif Habib Securities Limited under the Scheme of Amalgamation set by the State Bank of Pakistan acquired the Pakistan operations of Rupali Bank Limited. It became Arif Habib Bank.
On March 31, 2010, Suroor Investments Ltd, a Mauritius-based investment firm, acquired 59.41 per cent stake in Arif Habib Bank Ltd from Arif Habib Securities Ltd. And on the 18th of August 2010, Arif Habib Bank Ltd was rebranded as Summit Bank Ltd, according to the Summit Bank's website.
Summit Bank's parent company, Suroor Investments Ltd, later acquired majority shares of My Bank Ltd and Atlas Bank Ltd in Pakistan. The operations of the latter banks were then merged under a single umbrella of Summit Bank Ltd, thus expanding the bank's network to more than 193 branches.
© 2023 - All Rights with The Financial Express