Government to inject Rs 66 million equity in FWBL

The government has decided to inject additional Rs 66 million in the First Women Bank Limited (FWBL) as equity to prevent flight of deposits which, the finance ministry fears, could lead to almost 50 percent shrinkage in its size, official sources told Business Recorder.
The finance ministry is of the opinion that the public sector status of the FWBL has changed due to divestment of share of nationalised commercial banks (NCBs) and the bank may not be able to maintain effective linkage with the target market and its performance could be adversely affected, sources added.
Currently, the direct shareholding of the government in the FWBL is 19.62 percent and indirect shareholding held by banks is 23.01 percent, ie, a total of 42.63 percent, sources continued.
Taking into account further divestment of government's holding in the HBL from 38.5 to 51 percent, in ABL from 88 to 100 percent and in UBL from 66 to 100 percent, the ministry has proposed that the government may inject Rs 66 million as equity in the FWBL which, the ministry believes, would be a step towards retaining public sector status of the FWBL for the time being.
This step would bring GoP's direct/indirect shareholding in the bank to 51 percent.
Sources said the FWBL, in addition to raising its paid-up capital to Rs 2 billion set by the State Bank of Pakistan (SBP) for commercial banks, would also develop a business plan.
The bank also plans to consolidate and restructure its Information Technology (IT) infrastructure with e-banking and online connectivity, human resource, risk management and manuals, market image building, training and support infrastructure and branch expansion programme, sources further said.
The authorised capital of the bank is Rs 300 million and its paid-up capital is Rs 283.650 million.
The present shareholding of the MCB is Rs 75.96 million (26.78 percent); HBL, Rs 75.96 million (26.78 million); ABL, Rs 25.44 million (8.96 percent); NBP, Rs 25.32 million (8.93 percent); UBL, Rs 25.32 million (8.93 percent) and Ministry of Women Development, Rs 55.65 million (19.62 percent).
Sources said the Economic Co-ordination Committee (ECC) of the cabinet, which is meeting here on Tuesday with Prime Minister Shaukat Aziz in the chair, would approve the proposal which has already been cleared by advisor to prime minister on Finance Dr Salman Shah.