The Finance Ministry has failed to release the allocated funds of Rs 500 m for equity injection in First Women Bank Limited (FWBL), despite repeated requests put forward by the management, reported a national daily.Sources have revealed that this was stated by FWBL in its interim financial information submitted to the Cabinet Committee on Privatisation (CCoP) for the first nine months ending on 30 September 2016.The CCoP has included FWBL in its privatisation program for early implementation.
The management has been taking up the matter with the ministry for the urgent release of funds. Extension granted to the Bank for meeting the minimum capital requirement (MCR) expired on 30 June 2016 and govt shareholding in the bank through Finance Ministry stands at 80.16pc.
The FWBL was incorporated under the Companies Ordinance, 1984 in November 1989. The bank currently operates a network of 42 branches and 1 booth spread across 24 cities nationwide.
The federal govt injected Rs 2 billion in the bank as equity in recent years, increasing its shareholding to 80.16% whereas the rest are held by MCB Bank Limited, Habib Bank Limited, Allied Bank Limited, National Bank of Pakistan, and United Bank Limited.
Being a public sector bank in addition to State Bank of Pakistan’s prescribed MCR, the bank is required to maintain a minimum capital requirement of Rs 3 billion and capital adequacy ratio of 18% at all times.
As on sept 30 2016, the bank’s MCR representing paid up capital (net of accumulated losses) stood at Rs 3.020 billion. The CCoP in October 2013 approved the privatisation of 69 public sector entities (PSE) as part of privatisation program including FWBL. This was in addition to SBP’s orders to implement a concrete capital enhancement plan and appointment of competent and professional management (from private sector) alongside proper accountability mechanism to monitor its functioning and performance which must be streamlined to make FWBL a viable bank/financial institution.
Furthermore, SBP endorsed privatisation of FWBL and stressed upon recapitalisation of the bank by bringing in strategic investors with sound knowledge of business banking with focus on women development.
In its board meeting held on January 17, 2017, the Privatisation Commission Board recommended the privatisation of FWBL in the privatisation program for early implementation. The recommendation was sent to CCoP for consideration and approval.
