ISLAMABAD: The federal government’s policy to appoint foreign professionals on important positions is not yielding the desired results, as officials seem reluctant to come to Pakistan.
According to sources, Zarai Taraqiati Bank Ltd (ZTBL) President Adnan Ghani has not taken the charge of his position even after the passage of almost two months. This is why the government-owned bank has failed to publish its financial reports for the last two year, they added.
The cabinet had given the approval for the appointment of Adnan Ghani as ZTBL president on February 13, 2019.
Sources said that delay in assuming the charge is due to the fulfillment of Fit & Proper Test (FPT) criteria of the State Bank of Pakistan and other applicable laws/rules/regulations.
The Ministry of Finance had mentioned in its summary that if the federal cabinet approves Ghani’s appointment, it would be subject to the fulfillment of FPT criteria of SBP and other applicable laws/rules/regulations. Furthermore, the finance ministry would also have to go for verification of citizenship of the appointee in order to comply with the requirements of Section 11 of Banks (Nationalisation) Act, 1974.
Adnan Ghani had declared his British nationality to the government, the MoF summary stated.
Sources said that ZTBL failed to publish financial reports for 2017-18 and 2018-19, adding that the last issued statements were for the period ending March 2017.
By the year ending March 2016, the bank’s revenues amounted to approximately Rs1,198 million. However, according to the consolidated condensed interim financial statements, by March 2017, the bank had made a loss before taxation of Rs56 million, showing a net decrease of Rs1,254 million.
It is pertinent to mention that all banks are required to prepare their annual financial statements in a prescribed manner on the last working day of that year. These financial statements together with the auditor’s report, as passed in the annual general meeting, shall be published and circulated as well as furnished, like returns, to the SBP as prescribed in the BCO, 1962.
Sources said that the board of ZTBL is incomplete and “even the members who have been selected are yet to formally take charge and start operations”.
The ministry has proposed the names of a few bureaucrats to take charge as the ZTBL board chairman but the SBP is of the opinion that they need to bring seasoned bankers on the board so as to introduce thorough reforms, they added.
“It would have been better if they (government) had brought someone already from ZTBL to the top. He would have been familiar with the management, team, and the state of affairs,” A ZTBL official, on the condition of anonymity, told Pakistan Today. “But this happens frequently when an outside official is given the charge. Half their tenure goes into learning about the operations, and then there is little time left to introduce reforms or improve the management.”
He said the SBP is not just the regulator of ZTBL, but is also the de facto owner of ZTBL, so the final say in the choice of directors, appointment of board chairman, as well as president, rests with the apex bank.
The official said since it is up to the SBP and the Ministry of Finance to resolve this issue and it is not ZTBL’s own prerogative, the Securities and Exchange Commission of Pakistan has not been putting any penalties or fines on the bank for the delay in the issuance of financial statements.
Upon contact, the SECP spokesperson said, “We have sent them (ZTBL management) reminders and notices but since it’s a government-owned entity and no shareholders’ interest is involved, the commission has taken a lenient approach.”
What are SECP and SBP doing?