Two new names emerge for BOP presidentship after SBP shoots down Talib Rizvi's appointment

Editor's Note: An earlier version of this news item mentioned a few allegations that could not be independently verified and hence have been removed. The error is regretted.

LAHORE: Two names have emerged to fill the position of the Bank of Punjab’s (BOP) presidentship after the controversial removal of Syed Muhammad Talib Rizvi from the position of BOP President and CEO.

Talib Rizvi was appointed as BOP’s President and CEO by a notification of the government of Punjab in April, however, in a reply to the bank’s request dated April 26, 2019, for the ‘Fit and Proper Test’ (FPT) clearance, the State Bank of Pakistan (SBP) refused to clear Talib Rizvi for the position despite all other agency clearances and checks in place, stating his lack of ‘diversified experience’ as the core reason.

The letter read, “In this regard, your request for FPT clearance of Syed Muhammad Talib Rizvi for his proposed appointment as President/CEO of BOP has been considered. However, we regret to inform that at this point in time we are unable to clear his FPT for the position of President/CEO of BOP as he lacks diversified experience and skill set required for this position.”

Since the State Bank’s reply dated July 17, 2019, no further information has been issued by the bank regarding the future president and as to who exactly is at the helm of the bank currently. It is being suspected that Khalid Siddiq Tirmizey, Deputy Chief Executive Officer Bank of Punjab, who was earlier appointed as the Acting President on December 7, 2018, before Rizvi’s appointment and later removal from the post of president, will continue to perform the duties until a new president is appointed.

FUTURE MR PRESIDENT

Since Talib’s removal, several names have surfaced as the new replacement, however, sources have informed Profit that two names, Hassan Raza and Mustafa Hamdani, are being considered as the favourites for the bank’s top slot.

Hassan Raza is a career banker with 28 years of experience in the banking industry locally as well as overseas. He has previously served as SEVP/Group Executive Corporate Banking Group at UBL, as Group Executive/ Head Structured Credits at HBL, as Group Executive Business at Habib Metro and has also served as CEO of Habibsons Bank (a subsidiary of HBL UK).

Sources allege that State Bank’s Governor Reza Baqir is supporting Hassan Raza for the appointment as BOP president.

On the other hand, Mustafa Hamdani, who is also a career banker, with less experience as a Group Head of a bank as compared to both Talib Rizvi and Hassan Raza, is being reported as the favourite of the current BOP Deputy CEO Khalid Tirimzey.

However, the whole process is being kept hush and out of the spotlight.

Profit approached BOP Chairman Dr Pervez Tahir for a comment, however, after almost 3 days, he is yet to reply.

CONTROVERSY SURROUNDING TALIB’S APPOINTMENT

Earlier in April, Talib Rizvi was appointed as a replacement for acting president Khalid Siddiq Tirmizey after the departure of former President and CEO Naeemuddin Khan, who was entangled in political controversy. It was announced that Rizvi’s appointment was made in line with the new challenges and targets for the bank since the bank’s financial outlook remains stable with no major losses. Yet some even tagged him as a favourite of the Pakistan Tehreek-e-Insaf government.

Nonetheless, just a few months after taking the helm of the provincial bank, he was asked to step down due to SBP’s refusal for FPT clearance. It was earlier reported that despite the Punjab government’s notification, Talib was being hindered from performing his duties, while some sources even alleged that he was not allowed to operate from the President’s secretariat (president’s office).

Interestingly, senior bankers within the banking industry seem to be divided over SBP’s response, raising serious questions over the verdict.

Sources within BOP and SBP have also alleged that SBP’s decision regarding Talib’s removal is based on anonymous tips, unnamed letters and personal preferences. And even more, none of Talib’s former bosses and colleagues were contacted in regards to the FPT clearance, indicating backdoor diplomacy.

Retired Banker and Talib’s former boss at Bank Alfalah Pervaz Shahid told Profit, “It is unfortunate to see what has happened with Talib. I cannot comment on SBP’s procedures however Talib has served at senior management positions and every year FPTs were conducted internally and externally as well. Moreover, senior banker Zubair Soomro was part of the selection committee and if any criteria were being violated then he would have pointed out there and then.”

He added, “In my personal opinion Talib Rizvi is overqualified for the job and is indeed an excellent banker. And as far as Talib’s age is concerned as a criterion for the job, major banks in Pakistan that have seen a decline, were all led by well-aged professionals.”

Profit, having consulted at least 5 senior bankers, 4 were of the view that if the same criteria of ‘diversified experience’ is applied to all current CEO quite a few would fail to pass the FPT.

Another banker claimed that other presidents and CEOs including BankIslami Pakistan CEO Syed Amir Ali, Allied Bank Limited CEO Tahir Qureshi and former Punjab Cooperative Bank Limited and ZTBL CEO Talat Mahmood all had less or comparable experience to Talib Rizvi at the time of their appointment.

Syed Amir Ali has a total banking experience 13 to 14 years, while Tahir Qureshi who has more experience in core banking than business banking were both appointed as bank presidents. Moreover, Talat Mahmood had only served as Area Manager at United Bank Limited and at ABN Amro Bank, before being appointed as the bank's president.

Meanwhile, some have come forward regarding the wording of the SBP’s letter.

The SBP letter also stated, “It may please be noted that the above FPT Assessment of Syed Muhammad Talib Rizvi is only for the position of President/CEO of BOP and may not be construed as his ineligibility for appointment against any other suitable position in a bank/financial institution provided he fulfils the requirement of such position.”

Various bankers are demanding clarity over the apologetic nature of the letter as well as questioning the choice of words. They say that if Rizvi is fit to serve at any other suitable position in a bank/financial institution, then why is he not being appointed as the CEO for BOP.

Nonetheless, previously Allied Bank’s current President Tahir Hassan Qureshi’s FPT clearance was also declined by the SBP sighting similar reasons, and he was then appointed on another key post only to be promoted as President of the bank later on January 01, 2017. The SBP states that this is standard procedure and is in no way questioning Rizvi’s capabilities and BOP may choose to propose his appointment as the President once again after some time, which can be reviewed by the State Bank once again.

It is pertinent to mention that FPT clearances are usually issued within a few days if not weeks since it hinders the applicant bank’s operations, yet in BOP’s case the reply was received after almost 3 months.

When contacted for a comment on these developments, Talib Rizvi said, “I respect SBP’s decision,” adding, “I am a passionate banker and absolutely love what I do and would continue to provide my services within the banking sector.” He, however, denied commenting further on various speculation surrounding the SBP’s letter.

THE STATE BANK'S STANCE

The State Bank of Pakistan’s spokesperson, while talking to Profit, declined to comment on the rumours regarding favouritism, backdoor diplomacy and the specifics of Talib’s removal, however, he maintained that the State Bank being the banking regulatory authority in Pakistan holds the right to approve and disapprove the appointment of president/CEO and other key positions for the banks in Pakistan and that all criteria had already been clearly marked.

Later in a written reply regarding the matter, SBP Spokesperson Abid Qamar told Profit, “The FPT is described under Regulation G-1 of Prudential Regulations for Corporate/Commercial Banking (Risk Management, Corporate Governance and Operations) of the State Bank of Pakistan, which defines the criteria comprehensively for the selection of a Bank's President/CEO. The same is available on SBP's website.”

He further added, “The FPT of any individual for the position of President/CEO of a bank is carried out by SBP on the basis of regulations existing at the time decision is required. SBP assesses every candidate using a holistic approach based on all the information available to it and the decision is communicated to the relevant institution only. For any further information, the institution may be approached directly.”

It is noteworthy that Profit did approach BOP chairman to whom SBP’s letters were addressed and Punjab’s finance secretary, however, they are still to respond despite repeated attempts.

Addressing the rumours Abid Qamar stated, “Further, SBP cannot answer any general query that entails past records of large proportions or based on rumours or speculation.”

The state bank introduced the FPT clearance in order to strengthen the corporate governance regime in line with the international best practices. According to the guidelines all senior management appointments, including any executive, acting as second to CEO, by whatever name called, and including the Chief Operating Officer (COO) and Deputy Managing Director, Chief Financial Officer/Head of Finance/Head of Accounts/ Head of Audit and Company secretary, must first seek clearance from SBP, only after the clearance under the FPT criteria can the person assume the duties of the office.

The SBP's FPT criteria states that any fresh appointments or reappointments should clear 6 key areas including honesty and integrity, track record, solvency and financial integrity, and experience and qualification.

Moreover, the SBP letter refusing Talib’s FTP clearance also stated, “Considering the urgency of the matter, the bank is advised to entrust acting charge of the office of CEO to a key executive of the bank, who meets the FPT requirements for the subject position, in line with the BPRD Circular Letter No. 12 of 2011.”