Summit Bank reiterates operations running smoothly and efficiently

SBP in a press release said the rumours circulating about Summit Bank in the media, especially social media were baseless and misleading besides advising the public and depositors of the bank to not pay any heed to such rumours

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LAHORE: Summit Bank on Wednesday said its operations were working normally and efficiently as per a notification issued by the central bank on Monday highlighting it was efficiently meeting its obligations towards the depositor.

In a notification sent to the stock exchange on Wednesday, Summit Bank said, “The apex regulator in its notification has conveyed that the instructions provided in the ensuing order, shall in no manner, impact the operations of the Summit Bank or have any effect on the depositors’ money as the bank is working in a normal manner and efficiently meeting its obligations towards the depositors.”

Furthermore, in the notification issued on Monday, the central bank said the rumours circulating about Summit Bank in the media, especially social media were baseless and misleading.

Also, SBP advised the public and depositors of the Summit Bank, to not pay any heed to such rumours

And the central bank reiterated its commitment to safeguarding the interest of the depositors whilst highlighting the banking system of Pakistan was stable and robust.

Complementing its shareholders, customers, employees, business partners, regulators and unbiased media for their continued support, Summit bank also thanked the central bank for issuing for issuing the press release to clear out all sort of rumors about Summit Bank, and for always playing an exceptional role for safeguarding the interest of depositors and for ensuring soundness and stability of the banking system.

Summit Bank shares were trading at Rs1.67, up Rs0.05 (+3.09 percent). KSE-100 index was trading at 39,455.12 points, up 2.31 points (+0.01 percent) at the time of filing this report.

Background

Summit Bank has been entangled and rocked by the money laundering case of Rs35 billion which saw the FIA approaching the central bank for its equity details.

This development comes amidst the Rs35 billion money laundering case being probed by FIA against 13 firms on the directives of the apex court after it was discovered 29 ‘fake’ accounts had been opened in three banks Summit Bank, United Bank and Sindh Bank

On a request by FIA director general Bashir Memon, the court ordered the freezing of Rs7 billion deposited by the Summit Bank as its equity in the SBP.

The FIA chief told the court that the inquiry into the suspicious transactions was initiated in 2015 on a source report and, as a result, 29 ‘benami’ accounts were identified.

Of these 16 were in the Summit bank, eight in the Sindh Bank and five in the UBL. Seven individuals were involved in suspicious transactions of Rs35bn, he added.

The bank has been jolted by the arrest of its forner president and CEO, ex-chairman PSX Hussain Lawai in the case who is also a close-aide of PPP of former president Asif Ali Zardari.

On Tuesday, SECP directed the Pakistan Stock Exchange (PSX) to immediately remove Hussain Lawai as PSX Board of Directors Chairman.

In the interest of the public and the capital markets, SECP directed PSX to remove Lawai and appoint a new Board chairman, while ensuring compliance with the regulatory requirements.

Merger with Sindh Bank hits snags

In May, the apex court had said the proposed amalgamation of Sindh Bank and Summit Bank won’t go ahead without its approval.

The proposed merger of Summit Bank and Sindh Bank would be overseen and managed by the Supreme Court (SC), for which a three-member bench was formed and is being chaired by Chief Justice, Pakistan Mian Saqib Nisar.

A fresh report was presented by the State Bank of Pakistan before the apex court saying both banks were willing to start the amalgamation anew.

However, the apex court cautioned the merger would be blocked if it didn’t follow the rules and regulations.

Both banks were instructed by the apex court to present a detailed report regarding the proposed amalgamation.

In mid-April, the apex court had extended its restraining order regarding the merger of Sindh Bank and Summit Bank until further orders and had put off the court hearing to May 5.

The apex court bench comprising Justice Faisal Arab and Justice Sajjad Ali Shah had heard the suo moto case against the merger at its Karachi registry.

The State Bank of Pakistan (SBP) Governor Jamil Ahmed appeared before the court and informed that the central bank had no objection to the merger of the two banks.

Ahmed stated the State Bank was monitoring the proposed merger of the banks in accordance with the rules and regulations.