'Extraordinary' loan delinquency forces Pakistani state-owned bank to close Bangladesh branch 

Exterior view of National Bank of Pakistan in Dhaka, Bangladesh, on March 2019. (Photo courtesy: Zahid Islam/Online)
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Updated 05 March 2021

'Extraordinary' loan delinquency forces Pakistani state-owned bank to close Bangladesh branch 

  • The National Bank of Pakistan has branches in 21 countries and assets worth $20 billion
  • As of December last year, NBP Bangladesh’s defaults amounted to $164 million, or 97.7 percent of its total loans

DHAKA/KARACHI: The National Bank of Pakistan (NBP) is closing one of its Bangladesh branches after failing to recover nearly 98 percent of its loans from Bangladeshi debtors, the bank’s country head has said.
The Pakistan government-owned NBP has branches in 21 countries and assets worth $20 billion. It has been operating in Bangladesh as NBP-BD since 1994, with four branches in three cities, serving about 8,000 customers.
The bank ran into trouble in 2013-24, after numerous debtors — mainly from the apparel sector — failed to meet loan obligations, Bangladesh central bank data shows. In December last year, NBP-BD’s defaults amounted to $164 million, or 97.7 percent of its total loans.
“We are going to close the operations at our Sylhet branch due to an extraordinary situation,” Mohammad Quamruzzaman, NBP-BD chief executive, told Arab News earlier this week. “The headquarters in Pakistan has given us the approval, and the shutdown process is underway.”
In the past six years, the bank has filed 143 cases against loan defaulters, recovering about $23 million, Quamruzzaman said, adding that the bank was now trying to recover more without litigation and had suspended loan disbursement last year.
“Our high priority now is to recover the non-performing loans. We are focusing on an alternative dispute resolution (ADR) process where we sit at the negotiation table with the clients,” he said. “The good news is that we are receiving some positive results in the ADR process where the banks offer concessions to the defaulters and they, in turn, get the opportunity to have a clear banking credit record.”
Without clearing their records, Quamruzzaman added, businesses “can’t avail loans from any other banks in the future.”
Manzoorul Alam, managing director of Ibrahim Composite Textile mill (ICTM), which borrowed $8.5 million from NBP-BD in fiscal year 2012-13, said negotiations with the bank were underway.
“During negotiation we offered the bank to repay around $16.5 million. We sent this proposal in December 2019 and there was no work last year due to coronavirus pandemic,” Alam told Arab News. “I had a discussion with the bank around three weeks back and they assured to resolve the matter shortly according to our negotiations.”
Pakistani officials at the NBP’s head office in Karachi were unavailable for comment despite repeated requests. Bangladesh Bank, the central bank, declined comment.
Zahid Hussain, former lead economist of the World Bank in Dhaka, said the Bangladeshi central bank should create a safety net for lenders by enhancing its supervision, and “save the NBP-BD from the deep crisis.”
“There are few options which the central bank may consider, like injection of new funds, merger with a solvent bank, the appointment of an administrator etc. In the current scenario, NBP should run its operations under the close supervision of the central bank,” he told Arab News.
Another Bangladeshi economist, Policy Research Institute executive director Ahsan H. Mansoor, said the NBP’s situation was extraordinary as defaulted loans are about 10 percent of all loans at banks in Bangladesh.
“This is an extraordinary situation that NBP-BD is struggling with around 98 percent defaulted loans,” he said. “There should be an investigation [into] who were these borrowers and how it took place.”
As per the NBP-BD’s Annual Report 2019, its branches recorded a net loss of BDT 664 million in 2019, up 60 percent Year-Over-Year (YoY) as compared to BDT 415 million of 2018.
“The main reasons for this loss were a 20 percent YoY jump in interest expense to BDT 1.6 billion and a whopping increase in total provisioning to BDT 137 million (CY19: nil),” Sana Tawfik, Banking sector analyst at Karachi-based Arif Habib Limited, told Arab News.
The branches incurred an OPEX of BDT 197 million compared to BDT 174 million recorded in the same period last year, marking an increase of 13 percent YoY, which “increased pressure on the bottom-line.” 
“As of Dec. 2019, the cumulative ADR and IDR of the branches stood at 74 percent and 79 percent, respectively,” Tawfik said. “Going forward, a turnaround in the overall earnings is dependent upon successful recovery of loans and advances, increasing business volumes, the success of commercial and strategic initiatives and financial and liquidity support from concerned stakeholders, as per the Annual Report (2019).”


Pakistan records highest single-day virus death toll this year

Updated 18 April 2021

Pakistan records highest single-day virus death toll this year

  • COVID-19 death toll on Sunday was second highest since the beginning of the outbreak in February last year
  • Increasing number of fatalities comes as the number of people getting vaccinated has dropped in the first days of Ramadan

ISLAMABAD: Pakistan on Sunday recorded 149 coronavirus-related deaths — its highest single-day COVID-19 death toll since June last year, government data showed, as a third viral wave sweeps through the country.

The South Asian country of 220 million has recorded 756,285 infections and 16,243 deaths since the beginning of the outbreak in February last year.

At least 6,127 new coronavirus cases were reported in the past 24 hours by the National Command and Operation Center (NCOC), which oversees the country’s pandemic response. According to official data, 4,446 coronavirus patients are critical.

Most of the daily deaths, 97, were reported in the country’s largest province, Punjab, followed by Khyber Pakhtunkhwa — 35.

Sunday’s virus death toll is the second highest since the beginning of the pandemic. The highest number of fatalities was recorded on June 19, 2020, when 153 people died of COVID-19.

The increasing number of COVID-19 deaths comes as the number of people getting vaccinated against the virus is believed to have dropped during the first days of Ramadan, as many fear that receiving a shot could break their fast.

As infection figures are rising, Pakistan on Wednesday will start vaccinating residents aged 50 or older against COVID-19, Planning Minister Asad Umar said on Saturday.

The country began its vaccination drive last February with doses of the Sinopharm vaccine donated by China, starting with health workers, followed by people above the age of 60.

Last week, Umar, who also heads the NCOC, said Pakistan had so far vaccinated about 1.3 million people and intended to launch a general vaccination program for all citizens after the fasting month of Ramadan in mid-May.

American media company Bloomberg recently reported that Pakistan would take a decade to vaccinate 75 percent of its population — required for herd immunity — at its current immunization pace.


Pakistan denies reports on FM’s meeting with Indian counterpart in UAE

Updated 45 min 21 sec ago

Pakistan denies reports on FM’s meeting with Indian counterpart in UAE

  • Shah Mahmood Qureshi reached the UAE on Saturday, while his Indian counterpart will arrive on Sunday 
  • UAE visit comes days after a top diplomat confirmed the Gulf state was mediating between India and Pakistan

ISLAMABAD: Pakistan’s foreign office has denied reports of an upcoming meeting between Foreign Minister Shah Mahmood Qureshi and his Indian counterpart, S. Jaishankar, in the United Arab Emirates.

Qureshi arrived on a three-day visit to the UAE on Saturday where he is scheduled to meet the Gulf state’s foreign minister, Sheikh Abdullah bin Zayed Al-Nahyan. Jaishankar will travel to the UAE on Sunday, according to the Indian foreign ministry.

India’s announcement that Jaishankar’s visit will coincide with Qureshi’s triggered speculation about a meeting between the two, as their arrival in the UAE comes just days after the Emirati envoy to Washington confirmed the Gulf state had been mediating between the nuclear-armed rivals to help them reach a “healthy and functional” relationship.
 

“No such meeting is scheduled during foreign minister Shah Mahmood Qureshi’s ongoing visit to the UAE,” Pakistan foreign office spokesman, Zahid Hafeez Chaudhry, said on Saturday evening, responding to a query about a possible meeting between the Pakistani foreign minister and his Indian counterpart.

“During the visit entire spectrum of bilateral relations will be discussed. Discussion will also be held on regional issues of interest,” he told Arab News.

In a session with Pakistani businessmen in Dubai after his arrival, Qureshi said the main purpose of his visit

“The main purpose of my visit is to promote bilateral trade and cooperation between Pakistan and the United Arab Emirates in a wide range of fields,” he told participants of a meeting hosted by the Pakistan Business Council.

“I am happy that a large number of Pakistanis live in the UAE, and they are playing a positive role in the construction and development of this country with their hard work and dedication,” Qureshi said.

The UAE is home to the second largest Pakistani community abroad.


Pakistani expats await family reunions as Saudi readies to lift flight ban

Updated 18 April 2021

Pakistani expats await family reunions as Saudi readies to lift flight ban

  • Several expatriates face an agonizing wait on relatives stranded in their homelands by flight suspensions, particularly during Ramadan
  • Saudi will resume international flights, which were suspended due to COVID-19 travel restrictions, on May 17

RIYADH: Syed Faiz Ahmad says he’s worried about the fate of two of his relatives who traveled to Pakistan for emergency reasons but were left stranded there after Saudi Arabia suspended flights to and from the Kingdom in the wake of the global coronavirus pandemic.

“One went to help his ailing father, leaving his family behind in Riyadh. But he got stuck. His wife and two children are all alone here and are desperately waiting for him to return, especially during this month of Ramadan,” Ahmad, a Pakistani expatriate residing in the Kingdom, told Arab News.

He is one of several expatriates in the Kingdom who face an agonizing wait on relatives stranded in their homelands by flight suspensions, particularly during Ramadan when most families look forward to gatherings around the iftar table.

Every Ramadan, with sunset nearing, families sit together during iftar to break their dawn-to-dusk fast, giving everyone a chance to catch up during the month-long festivity culminating in Eid Al-Fitr.

However, many expats are anxiously watching airline schedules as countries ease travel curbs, opening the way for family reunions.

International flights suspended due to coronavirus travel restrictions will resume on May 17, Saudi Arabia’s civil aviation authority GACA said in a circular.

Anwar Pasha Ansari, an Indian expatriate working in Jeddah, told Arab News that his daughter Heba Anwar is stranded in India.

“No father and mother should go through this agony,” he said.

Ansari said that his daughter left Jeddah to appear for her bachelor’s final exam in New Delhi, hoping to rejoin her family to celebrate Eid last year. “But perhaps destiny was preparing another fate,” he said.

Ansari said that travel bans “brought the curtain down for all parents like us whose children were held up in India.”
He added: “To add insult to injury, all students were asked to vacate their hostel and make their own living arrangements, which was a nightmare for parents working overseas.”

With no end to travel restrictions in sight, Ansari’s daughter planned to travel to Saudi Arabia via the UAE after spending 14 days in Dubai.
Ansari said that when his daughter arrived in Dubai in January, they were elated at the prospect of reuniting with her.

But with only three days left of her quarantine, a temporary traveling restriction from Dubai to Saudi Arabia came into force, and all hope was gone. “Heba spent a substantial time hoping against hope that flights would be resumed and checking any news pertaining to flight resumption to Saudi Arabia,” said Anwar. “She was only a couple of hours away from us.”

Finally, after all options were exhausted, Heba was forced to return to India, bravely telling her parents: “Papa and mummy, stay well, this phase will pass, too.”

Ansari’s story will be familiar to thousands separated from their children as the coronavirus pandemic challenges everyone’s patience, endurance and capacity to endure the hardships of separation.

Technology and video apps help but are not enough to bridge the gap as families face even more time apart.
Raafat Aoun, a Lebanese expat working in the Kingdom, told Arab News: “The closure of flights has affected many expat families. My brother-in-law had to travel to Beirut to attend to an emergency. Now he finds himself in a very difficult situation as he is stuck there, and his wife and four young children are all alone in Jeddah.”

Aoun said that his brother-in-law had been stranded for more than three months. “I am supporting them and extending them all the help I can. But this festive season is becoming very difficult for me, too. I hope and pray flights resume soon so that my brother-in-law can return to his family.”

There are nearly 1.06 million Pakistanis residing in the Kingdom with a majority working in unskilled sectors such as construction.


From socialites to restauranteurs, Pakistanis in UAE give back during Ramadan

Updated 18 April 2021

From socialites to restauranteurs, Pakistanis in UAE give back during Ramadan

  • Philanthropists and their families are personally involved in the delivery of meals and rations during Ramadan
  • The second Ramadan since the pandemic broke out in early 2020 brings with it charity amid a global economic downturn

DUBAI:  Pakistanis living in the UAE are helping the poor this year by personally delivering iftar meals and other essential food items during the holy month of Ramadan.

With a near global economic downturn impacting the poor due to COVID-19, the second Ramadan since the pandemic broke out in early 2020 brings some respite with increased charity.

Ajman-based Ayesha Sohail, 38, has taken her charity initiative online, and uses a mostly all-women Facebook group she created eight years ago called ‘UAE Fusion Socialites’ to get help from its 19,000 members.

Previously, she used the same platform to deliver 2,300 ration boxes from February to September during the lockdowns last year-- each box worth Dh385.

Ramadan packets ranging from Dh10-15 that are being distributed amongst blue collar workers in Ajman by Talha Ahmed Khan (AN Photo: Courtesy Talha Ahmed Khan)

“This year I have been getting messages for help from Sudanese, Filipinos and Indians as well,” Ayesha told Arab News on Thursday.

Ayesha circulates the calls for help among her group members, and asks them to contribute. Sometimes, she gets sponsorships from businesses.

“This year we have already given away 300 boxes to needy families and individuals in Ajman, Dubai and Sharjah,” she said, adding that the initiative will continue until the end of the month.

Each box contains 10 kilos of rice, flour, lentils, Rooh Afza and other food items that are delivered to the doorsteps of needy families by Ayesha, her husband and son, 12.

“Officials from Facebook also got in touch with me recently and appreciated how I was using the platform to help the community,” Ayesha said.

Saeeda Raiz and her two daughters packing essential food items at their home on April 15 to deliver amongst needy families in the UAE (AN Photo courtesy Saeeda Riaz)

Offline too, Pakistanis living in the UAE are making efforts to be personally involved in charity work.

Talha Ahmed Khan, a Dubai-based businessman, started an initiative called ‘Rizq’ to support those affected by lockdowns last year, and said that this year too, many people were surviving on the bare minimum.

Khan reached out to family and friends and asked them to support the 38 needy families and people he had identified by giving them warm meals and iftar every day for 30 days, from ‘Delhi Nihari’-- a restaurant he owns in Dubai.

Those offering support have been asked to choose between food combos costing between Dh10 to 15 or to independently choose meals they’d like to donate instead.

“A rider and I pick up the food packets at 4 p.m. and start out on deliveries which continue right until iftar time… sometimes I have to break my fast on the way back but it is all worth it,” he said.

During his efforts, Khan also came across a number of blue-collar workers whose salaries had been halved and who could save some money if they didn’t have to spend on food.

Food packets for 15 of the 38 workers have already been sponsored for a month while 23 others still need support.

Saeeda Riaz, a Dubai-based Pakistani businesswoman has also been delivering rations to 17 needy families who have reached out to her through an online platform called ‘Helping Hands’ launched two years ago.

Saeeda, who runs a property management firm, told Arab News that five of the 17 families had already been provided with food items to last them through the month.

“They need all the help that can be given to them,” she said.

Saeeda does the shopping and packing of food items herself, alongside her two children. Each pack contains 25 kilos worth of groceries.

“Since I deliver all these items myself, we can only do it in a limited way, she said. 

“But soon, the rest will be done too.”


Pakistan expands COVID-19 vaccination to people aged 50 and older

Updated 18 April 2021

Pakistan expands COVID-19 vaccination to people aged 50 and older

  • Pakistan has so far vaccinated about 1.3 million people out of its 220 million population
  • General vaccination program for all citizens expected to start after the fasting month of Ramadan in mid-May

ISLAMABAD: Pakistan will start vaccinating residents aged 50 or older against COVID-19 from Wednesday next week, Planning Minister Asad Umar said on Saturday.

The country began its vaccination drive last February with doses of the Sinopharm vaccine donated by China, starting with health workers, followed by people above the age of 60.

Earlier this week, Umar, who also heads the National Command and Operation Center (NCOC), the country's apex body for coronavirus response, said Pakistan had so far vaccinated about 1.3 million people out of its 220 million population and intended to launch a general vaccination program for all citizens after the fasting month of Ramadan in mid-May.

"Decision taken in today's NCOC meeting to start vaccination of people in the age group of 50 to 59 from Wednesday the 21st of April," Umar said in a tweet.

 

 

He told the media on Tuesday that the country was immunizing between 60,000 and 70,000 people on a daily basis and planned to increase the number after Eid Al-Fitr.

The number of those getting their jabs is believed to have dropped during the first days of Ramadan as many fear that receiving a shot could break their fast.

Pakistan Medical Association secretary general Dr. Qaisar Sajjad said that despite the fact that religious scholars have endorsed the opinion of doctors to continue with vaccination despite the fast, more awareness is still needed.

“The government has done arrangement for vaccination during night but since we are going through the peak of a third wave and the cases of coronavirus infection are growing, the authorities should run a rigorous campaign with video messages of religious scholars so that the process may go fast all the time,” he told Arab News.

American media company Bloomberg recently reported that Pakistan would take a decade to vaccinate 75 percent of its population at its current immunization pace.