Meezan Bank, Pakistan’s first and largest Islamic Bank, and Pak Suzuki Motor Company have signed an agreement to launch Meezan -Pak Suzuki Finance programme (Suzuki Finance).
An announcement here on Thursday said that Irfan Siddiqui, President and CEO, Meezan Bank, and Hirofumi Nagao, Chief Executive and MD Pak Suzuki Motor Company signed the agreement.
As part of the agreement both companies will run a joint campaign for the promotion of the both Normal & Residual Ijarah product for Pak Suzuki automobiles under the product umbrella of Meezan Car Ijarah (Auto Finance). Pak Suzuki will provide priority delivery to Meezan Bank’s customers who avail Car Ijarah for Pak Suzuki vehicles.
He explained the benefits of the Residual value Ijarah which allows customers the flexibility and freedom to pay a lower monthly rental. This is a second joint campaign MOU signed between the organisations to promote Meezan Car Ijarah products for Pak Suzuki automobiles in Pakistan.
State Bank of Pakistan (SBP) has officially granted due diligence permission to Habib Bank Limited and Bank Alfalah Limited (BAFL) for the acquisition of Citi Bank Consumers’ portfolio comprising credit card business, auto financing and personal loans.
For EconomyAge readers, if you remember, we break the news of this deal two weeks ago when our sources told us that both banks sought permission from State Bank to conduct due diligence of this said acquisition.
The two banks– HBL and BAFL– will evaluate the consumer business of the Citi Bank, which it planned to sell out for in pursuance of its divestment plans, said SBP’s spokesman Syed Waseemuddin, while talking with EconomyAge.
As soon as the process of the due diligence is completed by the banks, the will offer a price to Citi Bank to be set on negation between the party. Afterwards, the acquisition of the consumers’ portfolio will be carried out after approval of banking regulatory and one of among two banks will buy the consumers division Ciiti Bank.
Citi has entered its sixth decade of continuous presence in Pakistan to serve its corporate clients and retail customers in the country. The bank’s consumers division is possessing handsome number of customers who are mostly belong to elite and upper middle class of the society having good inclination to avail banking services come under consumer financing portfolio such as credit cards, car financing and etc.
Citibank has been cutting back its global branch network for the past five years after global meltdown hits its retail banking and investment operations.
It carried out lay-offs and restructured its operations in many countries including Pakistan. In 2011, it had sealed a deal to sell out its partial division of consumers financing portfolio, that is, housing finance, to BankIslami in early 2011, against the worth of Rs 95 Crore.
In an interview to an American newspaper, Governor State Bank, Yaseen Anwar, warns about critical economic conditions in coming months.
"I'm independent but cannot return Cheques from Govt of Pakistan", said Yaseen Anwar.
He said that foreign investment is at the lowest in history and fiscal deficit is touching 8% of GDP and there are no chances of reduction in interest rates due to excessive govt borrowings.
“I’m in a difficult position. I’m independent but not independent enough to return cheques from govt”, said Yaseen. “Although we can honor our international commitments but continuously falling reserves might put us in a tight spot”, he added.
Yaseen Anwar is a dual national and holds a U.S. citizenship with Pakistani nationality. He has 33 years of working experience across cities including New York, London and Paris, and his resume includes American banks, JP Morgan, Bank of America and Merrill Lynch.
Anwar is the fourth central bank chief in the three years since Asif Ali Zardari took over as president.
Hub Power, which has been in a long and fierce tax dispute with Federal Board of Revenues, finally settle by paying Rs 161 Crore to national exchequer. But only for the moment.
Hub Power initially lost the tax battle in Islamabad High Court and decided to took this matter in Supreme court. But before the honorable Apex court could decide anything, FBR freezes all bank accounts of Hub Power company, accusing them for delaying the tax payment.
In a recent notice sent to Karachi Stock Exchange, Hub Power informed investors that they decided to pay Rs 161 crore for the moment to restrict the potential exposure but the company strongly believes that its not liable for this tax and will continue to vigorously defend itself before the Supreme court of Pakistan. The tax advisers strongly believe that the eventual outcome ought to be in favor of Hub Power and the tax paid will be refunded.
We will update you on this matter as it develops.
No, I’m serious. And for the record, this is not my claim. Latest figures shared by the State Bank of Pakistan revealed that top 24,000 millionaire account holders in Pakistan owns Rs 2,118 Billion.
Epitome of economic disparity. 0.02% of Pakistani owns 40% of Bank Deposits
The interesting aspect of this data is that in last four years, which are presumed to be the worst years for Pakistan’s Economy, the number of crorepati in Pakistan increased by 50% to 36,500 from 24,000 in 2008.
The new 12,000 millionaires added about Rs 80,000 Crore (800 Billion) in bank deposits in the last three years. Of course they are not depositing everything. There must be properties and other investments involved which are not included in this figure. (Do I need to remind you how much Pakistani investors love to invest in Property). So if we take that ‘unknown’ figure, I’m sure this club of 36,000 elite millionaires will total way more than 70% of Pakistan’s total wealth.
These 36,000 people represents only 0.02% of Pakistan’s total population of 18 Crore people and yet they hold almost 40% of Pakistan’s total wealth in bank accounts. About 24,423 account holders, having an amount Rs 1 Crore and above, made a total deposit of Rs 1,323 Billion at the end of December 2008. The figure of account holders rose by 12,086 to 36,509 by the end of December 2011, taking the total amount to Rs2,118 Billion.
The economic growth during last four years hovers around an average of 2 per cent and one might question about the source of income of these 12,000 people who mysteriously becomes millionaires while Pakistan’s economy was facing joblessness, security conditions, trade barriers and rising fuel costs.
What can you Do with this kind of Wealth?
Depending on who you’re asking.
But for the sake of simplicity let us assume if all these millionaire decided to acquire stake in companies listed in Karachi Stock Exchange. According to a rough estimate, they can acquire KSE-30 companies (top 30 companies) four times over.
These companies includes, OGDC, Nestle Pakistan, Unilever, PTCL, MCB Bank, United Bank, Habib Bank, Bank Alfalh, National Bank, Attock Refinery, National Refinery, Engro Corporation, Dawoo Hercules and 17 other giants.
And not just once, four times over.
Was their illegal money involved?
“Well, not out of question”, told us few bankers who talked with EconomyAge only on condition of staying anonymous. “Given the economic conditions and tax evasion practices followed in Pakistan, this cannot be ruled out”, added another banker.
The Lahore University of Management Sciences (LUMS) and MCB Bank Limited signed an agreement on Saturday, May 12 through which MCB Bank will provide commercial loans to MBA and Executive MBA students of the Suleman Dawood School of Business (SDSB) of the university, says a press release.
The commercial loan facility will be pivotal for students who are currently financially unable to afford the cost of tuition and living facilities. This is one of the first ventures of such kind in Pakistan and is a testimony to MCB’s commitment to support higher education as well as the marketability of LUMS students.
While speaking at the ceremony, Dr Arif Butt, Dean Suleman Dawood School of Business, LUMS, said, “LUMS holds a need blind admission policy i.e. it does not discriminate on the basis of financial strength of the individual while admitting a student, the process for which is based purely on merit.
Today, LUMS gives 25pc of its tuition fee as waivers and aid to various students. At any point in time over 1/3rd of students in LUMS are availing some form of financial support.
The institution has consistently been including other stakeholders in the community to help with this important task through various endowments and scholarship programmes. This student loan by MCB is part of the endeavour for providing financial assistance to students and we hope to see the programme being expanded to include other graduate and undergraduate students.”
Ali Mubashir Kazmi, the Head of Consumer Banking at MCB said: This structured student loan facility for LUMS MBA Programme, is first of a kind being offered in the country.
This is in line with MCB Bank’s vision to provide financial assistance to talented students while maintaining financial viability of the product. This structured loan facility to LUMS is the first step towards this vision and we will also try to extend this facility to other premier institutions of the country. The lending rate under this scheme is subsidised as compared to commercial rate so that students can take educational loans on softer terms. We have introduced the concept of first loss in the structuring which is in line with structuring of similar products in more developed economies.
The Institute of Chartered Accountants of Pakistan (ICAP) on Thursday put up a liaison with the sports and youth affairs department of the Sindh government to provide expertise to unemployed youths of the province.
According to ICAP Manager Education and Training Tajwar Baig, 250 students applied for the 40 seats available for the eight-month training programmes.
Sindh Youth Affairs Minister Faisal Sabzwari, who himself is a chartered accountant, signed a memorandum of understanding with ICAP President Rashid Rahman Mir on Thursday, which will result in collaboration of the Sindh government with ICAP to provide the unemployed youth of the province with better educational and work opportunities.
The memorandum of understanding has been signed, according to which two short training programmes of eight months each and one comprehensive plan of chartered accountancy will be organised with the ICAP in Phase III of the Benazir Bhutto Shaheed Youth Development Programme during the current year.
Minister for Youth Affairs Syed Faisal Ali Subzwari praised the young students on this event, and emphasised that these programmes would develop their skills to a great extent.
“I believe that the project could not have been better timed, with the government’s ongoing drive of economy documentation. The youngsters passing-out would be able to help the small traders and businessmen in matters relating to accounting, tax and compliance of corporate laws,” President ICAP Rashid Rahman Mir said during the signing ceremony.
Zong, one of the leading telecom giant, finally steps into branchless banking industry with help from Askari Bank.
According to a news report by ProPakistani, a sister concern of EconomyAge, Zong is going to bring a full-fledged branchless banking solution, to become second telecom operator (after Telenor) to offer a mobile banking solution of this scale and third such mobile banking implementation (after Easypaisa and UBL Omni) in the country.
The pilot project will include most of the branchless banking products that Zong is going to offer, in addition to some other products such as salary disbursements.
It merits mentioning here that Askari Bank, backed by the Army Welfare Trust, was awarded a branchless banking license few months ago.
And Chinese Badly Need a Bank in Pakistan
Although the song of Pak-China friendship is quite famous in political and business circles but one thing that Chinese are still missing is a notable banking presence in Pakistan.
Five months ago there were rumors that the Industrial and Commercial Bank of China was in talks to acquire stakes in NIB Bank, one of the most inefficient of the middle tier banks.
Sources in the banking industry also rumored that China (through ICBC) has definitely been looking for acquisition targets. At one point in the past year, there were rumors of the Chinese giant possibly acquiring Faysal Bank. That rumor, however, was quickly dismissed when Faysal Bank announced that it is not for sale. Faysal’s Saudi owners are reported to be quite happy with their Pakistani bank’s profitability and growth.
Federal Board of Revenue, authority responsible for collection of taxes, has attached all bank accounts of Mobilink, while blocking all imports for the company, said a statement issued by FBR today.
Statement said Pakistan Mobile Communication Ltd (Mobilink) owed Rs. 860 Crore to the exchequer on account of mis-declaration of Sales Tax and FED, for which Mobilink had appealed the Income Tax Appellate Tribunal for a hold.
However, the Income Tax Appellate Tribunal recently upheld the decision of LTU, Islamabad and confirmed the payable tax amount of 8.6 billion rupees.
On receiving the decision of the Tribunal, Syed Ijaz Hussain, Chief Commissioner, LTU, Islamabad formed various teams of officers headed by Commissioner, LTU, Malik Muhammad Ashraf to recover the amount from the company through attachment of Bank accounts, blocking of imports and recovery through suppliers of the company, which include other telecom companies as well as the Pakistan Telecommunication Authority.
Mobilink’s said that it is in process of evaluating the situation, and their clarification on the development will come in a while. We will update the story when we get any word from Mobilink.
Sources close to FBR said that authority will now de-attach accounts only after recovering taxes and owed funds from Mobilink. FBR had carried out a similar operation for collection of taxes from PTA last year, from Hub Power this year and with Associated Press, today.
FBR statement confirmed that, as of today, all Bank Accounts of the Company have been attached and imports blocked accordingly.
FBR will take any further action on next working day.
Mobilink’s Viewpoint on the Matter:
Responding to FBR’s action, Pakistan Mobile Communications Limited (Mobilink) has clarified that the FBR’s ruling on Sales Tax and FED is sub-judice.
Mobilink in its statement said that company is one of the largest corporate tax payers in Pakistan, and has always remained at the forefront of making its due contribution to the nation’s exchequer.
Mobilink said that it paid PKR 34 billion as taxes in 2011 alone.
“Over its 17 year history of operations, Mobilink has remained committed to Pakistan, and respectful of all laws, including tax laws, which govern over Pakistan”, Mobilink’s statement concluded.
The Federal Board of Revenue (FBR) froze the accounts of the state-owned Associated Press of Pakistan (APP) for the non-payment of Income Tax.
The FBR had served a notice to the news agency on February 26 “to settle fiscal 2010-2011 accounts, as non-payment is a violation of income Tax Ordinance 2002.”
In a criminal breach the previous APP management despite deducting the income tax from the salaries of the employees during 2010-2011 failed to deposit around Rs 10 Crore with the FBR.
According to the FBR the outstanding amount “cannot be withdrawn” or settled till the due funds are deposited with the national exchequer.