A government move to withdraw existing shares of the state-run Rupali Bank from Pakistan-based Summit Bank has stalled for long mainly due to "bureaucratic tangles", sources said.
Officials said the government took the decision to sell 1.84 per cent or 32.77 million shares of Rupali Bank from the Pakistani bank in March 2015.
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 the Pakistani bank. The committee comprises representatives from the finance ministry, foreign ministry, Bangladesh Bank and a deputy managing director of the Rupali Bank.
The committee was recast after the post of its chief had fallen vacant. The bank authority has sent a letter seeking approval for the committee.
When asked, a senior official of the bank said, "Neither are we gaining little benefit from the Pakistani Summit Bank nor is there any positive prospect for the same. So, we have decided to sell out our existing shares."
In 2008, the Summit Bank issued 3.27 million bonus shares in favour of Rupali Bank. Currently, the Pakistani bank owes over PKR 16.3 million to the Rupali Bank, as mentioned in the Pakistani bank's balance sheet, he said.
"We have pursued many times through e-mail, over telephone for providing our dues. But, the bank authority mentioned reference to the state of Pakistan," deputy managing director of the Rupali Bank and chief of the committee Hasne Alam told the FE.
"Presently, price of shares of the bank is much lower than face value. We are waiting for an increase in the price of shares," he said.
Currently, Rupali Bank has 1.84 per cent shares with the Pakistani bank. Some 32.77 million shares out of the total shares of the Pak bank are held by Rupali Bank. Face value of each of the bank's 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 finance ministry.
According to annual report 2016 of the 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 quarterly report ended September 2017 of the Summit Bank, 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 31st March 2010, Suroor Investments Ltd, a Mauritius-based investment firm, acquired 59.41% 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 the single umbrella of Summit Bank Ltd, thus expanding the bank's network to more than 193 branches.
© 2023 - All Rights with The Financial Express