With Bank Makramah bid, the Essarani family may become the first Pakistani Hindu bank owners since Partition

In Pakistan’s banking industry, ownership changes usually follow a familiar script. A Gulf investor arrives with capital. A domestic industrial group tries to diversify into financial services. A bank with a damaged balance sheet searches for a sponsor with the money and patience to repair it. Regulators, wary of weak capital and poor governance, proceed slowly. Minority shareholders watch for a public offer. The State Bank of Pakistan, quite properly, makes everyone wait.

The proposed transaction at Bank Makramah Ltd has all of those elements. It also has one that is highly unusual in Pakistan’s post-Partition corporate history: the prospective buyer is a Hindu business family from Sindh. If the transaction is completed and if the group ends up with control, the Essarani family may become the first Pakistani Hindu family to own a bank since Partition.

That is not the formal issue before regulators. The formal issue is capital, ownership, fitness and propriety, and whether a new sponsor can strengthen a small Islamic bank with a chequered past.

Bank Makramah informed the Pakistan Stock Exchange on June 11 that its board had received expressions of interest from prospective investors and had granted in-principle approval to proceed with discussions with a consortium led by DM Holdings Ltd. The consortium has submitted a letter of intent to acquire a significant shareholding in Bank Makramah and to inject up to Rs26 billion of capital into the bank. Any investment will be subject to due diligence, negotiation of transaction documents, and corporate and regulatory approvals.

A subsequent public announcement of intention filed through Arif Habib Ltd, the manager to the offer, made the possible change of control more explicit. The percentage of shares to be acquired through a share purchase agreement has not yet been determined, nor has the size of the possible public offer. But under Pakistan’s takeover rules, an acquisition that leads to control can trigger an obligation to make an offer for at least half of the remaining voting shares. The transaction is, therefore, not merely an expression of interest. It is the beginning of a process that could change the ownership of a listed bank.

The proposed acquirer, DM Holdings Ltd, is new. It was incorporated in May 2026 as a privately held investment and holding company, barely a month before the Bank Makramah announcement. Its paid-up capital is modest. The substance lies not in the vehicle but in its owners: Deoomal Essarani, who owns 50%; Dr Tara Chand, who owns 25%; and Mahesh Kumar, who owns 25%. All three are directors and ultimate beneficial owners of the company.

The Essaranis are not bankers. That is part of what makes the transaction interesting. They are an industrial, agricultural and trading family whose businesses sit in the older economy: fertiliser, sugar, ethanol, grains, coal, chemicals, packaging and distressed-asset restructuring. Their operating platform is commonly associated with DM United Group or United Group, a diversified organisation founded in 1984 by Deoomal Essarani. The group’s own description is straightforward: it began with sugar and fertiliser trading and expanded into ethanol and packaging. It now presents itself as a diversified industrial group active in manufacturing, trading and distribution.

At the centre is Deoomal Essarani, the group chairman. He has been in the fertiliser business for about half a century and is described by the group as one of Pakistan’s largest fertiliser importers through United Agro Chemicals, marketed under the “7 Stars” brand. United Agro Chemicals, incorporated as a partnership in 1999, imports phosphatic and potassic fertilisers, distributes them through a dealer network across agricultural districts, and has also traded in wheat and sugar. That business is important not simply because of its scale, but because it explains the family’s access to rural cash flows, farmers, dealers and commodity markets.

The next layer is sugar. The family acquired Sindh Abadgar’s Sugar Mills in 2005, a listed sugar company based in Tando Muhammad Khan. The mill has long been part of Sindh’s sugar belt, with a crushing capacity of thousands of tonnes of cane per day. Later, the group acquired SGM Sugar Mills in Ghotki, a much larger unlisted sugar operation, and Ranipur Sugar Mills in Khairpur. Sugar mills in Pakistan are not merely factories. They are political-economic institutions: they buy from farmers, finance crops, store inventory, manage seasonal working capital, negotiate with provincial governments, and sit at the intersection of agriculture, industry and rural influence.

The Essarani family has also built a linked ethanol business. United Ethanol Industries operates a plant in Sadiqabad producing high-purity ethanol from molasses, the by-product of sugarcane crushing. The company says it exports to markets including the Middle East, Europe, Japan and Korea. This is the classic industrial logic of a sugar group: own or influence cane procurement, operate mills, use molasses for ethanol, sell into export markets, and capture more value from the same agricultural raw material.

Then there is the trading arm. Agro Trade imports and distributes coal to textile, power, paper and cement companies, with coal depots and transport arrangements. United Commodities provides indenting, sourcing and distribution services in petroleum products, coal, chemicals, additives and other industrial raw materials. The group has also acquired a petroleum storage terminal at Keamari, Karachi. Synergy Packaging manufactures HDPE drums, PET bottles and other packaging materials for industrial users. Pakistan Corporate Restructuring Company, in which the family is disclosed as having an interest, takes the group even closer to financial-sector assets: it is a vehicle created under the Corporate Restructuring Companies Act to acquire and resolve distressed assets.

The Bank Makramah bid, therefore, is not coming from an unknown speculative investor. It is coming from a family whose businesses are old-fashioned but substantial, whose balance sheet is linked to agriculture and commodities, and whose operations have required constant interaction with banks. Mahesh Kumar’s role in the group is especially relevant. The family’s own materials describe him as responsible for sales, banking and finance, with relationships that have facilitated the group’s financial requirements. In that sense, the family is moving from being a heavy user of bank credit to attempting to own a bank.

That is a large leap. Owning mills and trading houses is not the same as owning a regulated deposit-taking institution. A bank is not simply another balance sheet. It is a public trust, supervised by the central bank, dependent on confidence and governed by capital rules, related-party exposure limits, anti-money-laundering obligations, technology standards and Shariah governance in the case of an Islamic bank. Any new sponsor will have to pass the State Bank’s fit-and-proper scrutiny. It will also have to persuade regulators that a commodities-and-industrial family can run, recapitalise and govern a bank without treating it as a treasury arm for affiliated businesses.

The bank they are seeking to buy has its own complicated history. Bank Makramah began life far from its current identity. Its origins lie in the Pakistani operations of Rupali Bank, which were acquired by the Arif Habib group and transformed into Arif Habib Bank in the mid-2000s. Arif Habib Bank was listed in 2008. In 2010, Suroor Investments, a Mauritius-based investment company, owned by a Dubai-based investor, Nasser Abdulla Hussain Lootah, acquired a majority stake from the Arif Habib group and rebranded the lender as Summit Bank. Suroor then acquired Atlas Bank and MyBank, and those banks were folded into Summit, creating a larger branch network but not, ultimately, a stronger franchise.

For years, Summit Bank was one of Pakistan’s problem banks: small, undercapitalised, burdened by legacy issues and often discussed in the same breath as restructuring, sponsor support and regulatory forbearance. It had a network, customers and a banking licence, but not the financial strength of the larger commercial banks. Its name also became associated in the public mind with controversies of the preceding decade, even though the institution itself remained a regulated listed bank.

In 2023, Lootah, then a plurality shareholder, acquired a controlling stake and the bank began its transition from Summit Bank to Bank Makramah. The new name was approved as part of a broader effort to leave the Summit legacy behind and reposition the institution as a fully fledged Islamic bank. The bank’s own profile says the 2023 acquisition of 60.45% of its shares marked a new era and that the institution was being reshaped into an Islamic financial institution. More recent takeover documents identify Abdulla Nasser Abdulla Hussain Lootah as the largest shareholder with more than four-fifths of the issued capital.

The bank has been trying to repair itself. As of March 2026, it reported deposits of about Rs158.8 billion, total assets of Rs203.3 billion, net advances of Rs26.3 billion and investments of Rs83.8 billion. It still posted a loss before tax of Rs1.21 billion for the first quarter of 2026, though the after-tax loss narrowed compared with the same period of the previous year. Its gross non-performing-loan ratio remained high at 39.5%, though down from 41.5% at the end of 2025. The Islamic-banking business inside the bank was profitable in the quarter, but the overall institution remained in restructuring mode. The existing sponsor had already deposited Rs5 billion as advance against share subscription, which the State Bank allowed to be considered for minimum-capital and capital-adequacy purposes subject to conditions.

In other words, DM Holdings is not bidding for a trophy bank. It is bidding for a turnaround. The asset is a bank licence, a branch network, a deposit base, an Islamic conversion plan, a listed status and a balance sheet that needs capital and careful management. That explains the proposed capital injection of up to Rs26 billion. It also explains why the regulator’s approval will be the heart of the transaction. In Pakistan, anyone can dream of owning a bank. Far fewer can convince the State Bank that they should.

The religious dimension of the deal should be handled carefully. It would be easy to overstate it and turn a financial transaction into a cultural spectacle. The Essaranis are not buying a bank because it is Islamic; they are buying the bank that is available. Bank Makramah happens to be in the Islamic-banking lane because its current sponsor took it there and because the entire Pakistani banking system is being pushed in that direction. The Federal Shariat Court has directed the state to move the economy and banking system away from interest-based finance by the end of 2027. The State Bank has repeatedly said it is working towards that transition. Islamic finance is no longer a niche proposition in Pakistan. It is the official destination.

That means the apparent paradox — a Hindu family buying an Islamic bank — is more interesting than it is contradictory. Pakistan’s banking market is becoming Islamic by law and policy. If any Pakistani business family, Muslim or non-Muslim, wants to buy a bank in the current environment, it is increasingly likely to buy either an Islamic bank or a conventional bank that must become one. The owner’s religion is not the point of the banking model. Islamic banking in Pakistan is a regulated financial architecture: Shariah boards, profit-and-loss sharing structures, Murabaha, Ijarah, Diminishing Musharakah, Sukuk investments and product approvals. A non-Muslim shareholder can own an Islamic financial institution just as a Muslim shareholder can own a company that exports ethanol or manufactures pharmaceuticals. The regulatory question is governance, capital and compliance.

Still, history gives the transaction resonance. At Partition, Pakistan inherited a fragile banking system. Many banks had head offices in India, and much of the pre-Partition banking and trading capital in the areas that became Pakistan was associated with Hindu and Sikh communities. The movement of people and deposits after 1947 hollowed out parts of that system. Pakistan’s early banking sector was then built largely around Muslim-owned institutions such as Habib Bank, Australasia Bank and later United Bank, before nationalisation in the 1970s and privatisation decades later reshaped ownership once again.

For a Hindu business family from Sindh to potentially own a Pakistani bank would therefore be unprecedented in the post-Partition period. It would also reflect the quiet resilience of Hindu capital in Sindh’s real economy. In public discourse, Pakistan’s non-Muslim minorities are often discussed through the language of vulnerability, representation or rights. Far less attention is paid to minority business families that have continued to accumulate capital, run factories, trade commodities, employ workers and participate in the mainstream economy. The Essaranis are not entering banking from the margins. They are entering from sugar mills, fertiliser depots, ethanol plants, packaging lines, coal yards and commodity contracts.

That background may also shape their strategic interest in a bank. A group embedded in agriculture and commodities understands working capital. It understands seasonal finance. It understands farmers, dealers, mills, transporters, importers, exporters and industrial borrowers. A small Islamic bank with a rebuilt capital base could, in theory, be positioned around trade finance, agricultural value chains, SME banking and commodity-linked clients. That would be a more coherent strategy than trying to compete with HBL, UBL, MCB, Meezan or Bank Alfalah on national scale. Bank Makramah does not need to become a giant to be valuable. It needs to become solvent, credible and focused.

There is also the question of timing. Pakistan’s banking sector is entering a period of structural change. Falling interest rates are putting pressure on spreads. Islamic conversion will require product redesign, staff training, systems changes and Shariah-compliant asset generation. Smaller banks face rising technology and compliance costs. Customers are becoming more digital. The largest banks have the scale to absorb these changes. A smaller bank in turnaround mode has less margin for error.

For DM Holdings, the deal would be a first step into financial services at a demanding moment. For Bank Makramah, it may offer another chance at recapitalisation and sponsor-led repair. For the market, it is a reminder that Pakistan’s listed banking sector is still capable of surprises. A bank that began as Rupali’s Pakistani operations, became Arif Habib Bank, then Summit Bank, then Bank Makramah, may now pass from a Dubai investor to a Sindhi industrial family whose wealth was built in sugar, fertiliser and commodities.

Whether that family becomes the first Pakistani Hindu owner of a bank since Partition will depend on approvals, share transfers and final control. Whether that fact matters commercially will depend on what happens afterwards. If the Essaranis bring capital, discipline and a sensible niche strategy, the symbolism will be remembered as a footnote to a successful turnaround. If they fail, it will become another episode in the long history of weak banks looking for sponsors and sponsors discovering that banking is harder than trading sugar or importing fertiliser.

For now, Bank Makramah has a bidder, a possible Rs26 billion capital injection, and the prospect of a new controlling family. The State Bank has the next move.