BoP Board members barred from getting loans

LAHORE- The Board of Directors of the Bank of Punjab on Tuesday took some major decisions including revoking the previous policy by which the members of the Board of Directors were allowed hefty loans.

In a major policy shift , now onwards, the members of Board of Directors are barred from getting loans, sources disclosed to The Nation while sharing the details of the meeting called to clear the prevailing mess in the bank.

The sources revealed that the bank took the decision after finding that two to three members of the previous Board of Directors, who were also the owners and directors of some private companies, hugely benefited from this lacunae in the policy. They were awarded big loans against their companies or the ones owned by their near and dear ones. According to the previous policy, the Board members were allowed to get loans from the Bank of Punjab but to maintain a so-called transparency they were not entitled to attend the meeting deciding their respective cases.

At least three influential persons who secured loans in billions were the directors and owners of private companies and at the same time, they were also the members of the Board of Directors of Bank of Punjab.

Selection of New President, Executives:

According to well-placed sources, the Board of Directors of the BoP has decided to interview professional bankers to fill the top positions in the bank including the post of the President and the General Managers from next week in a bid to replace the top management of the bank.

The candidates will be interviewed by a panel comprising five professional members of the Bank's Board of Directors to be headed by Chief Secretary Punjab who is also the Chairman of the Board.

The Board will forward its recommendations to the Punjab Govt and the govt in consultation with the State Bank of Pakistan will appoint the new President of the bank. The posts have already been advertised in the national Press and the candidates will soon be invited for interviews before the final selection. The bank is looking for well-experienced and professional bankers to fill the positions of the President and Executives, sources disclosed, adding, highly qualified professionals will be appointed on the top slots.

'Board members are also considering a few names from the bank including some senior officers and others from outside', a Punjab Bank official disclosed.

The bank witnessed huge purges recently with the Punjab govt sacking 40 executives and officers of the Bank of Punjab including its former President Hamesh Khan on the charges of irregularities. The axe also fell on the previous Board when the new govt completely dissolved it.

Audit underway:

The complete legal and financial audit of the bank is underway to expose the board members who committed irregularities and sanctioned loans to their own firms without fulfilling the required standard, the sources informed.

The auditors of two leading firms have begun the audit of the Bank of Punjab to further dig out wrong-doings of the previous management.

The Ferguson & Co. Chartered Accountants firm is carrying out the financial audit of the Bank of Punjab while Raja Law Firm of Salman Akram Raja is looking into its legal aspects.

The sources in the Punjab govt further revealed that these firms had been asked to carry out the complete audit of the bank before June 30.

These firms will submit independent opinion in order to present true picture of the bank to the Board of Directors of the Bank of Punjab, the sources added.

These firms will carry out the legal and financial audit of loans above Rs 500 million sanctioned by the last management of the bank. The govt in the light of the audit report will take action against those found involved in malpractices and irregularities.

The govt had sacked the former President of the Bank of Punjab Hamesh Khan and his close allies after the State Bank of Pakistan pointed out that the Bank of Punjab had sanctioned highest loan in the history of the bank, to Harris Steels without fulfilling legal requirements.

The sources further disclosed that the former top management of the bank was also attempting to sanction more loans to some other companies but the process was halted as the govt dissolved the board after the matter was brought into the notice of the Punjab govt.

The auditors will also examine whether the former President Hamesh Khan and his allies sanctioned these loans after fulfilling the legal requirements or these were sanctioned without proper documentation. The auditors will also assess the value of the property on which the loans were sanctioned.