ISLAMABAD:
The government has drawn up a plan to provide affordable credit facilities to small and medium-sized businesses, which are considered a vital part of the economy and provide a large number of job opportunities.
The matter was taken up in a recent meeting of the cabinet while discussing the acceptance of resignation submitted by SME Bank Limited President and CEO Tahir Hassan Qureshi and the appointment of a new person at the helm.
During the huddle, the role of small and medium enterprises (SMEs) in the development of Pakistan’s economy through the provision of affordable credit was deliberated in detail.
Cabinet members considered the need for an alternative SME-focused financing structure on the pattern of other developing countries.
It was explained that following instructions from the prime minister, the Finance Division had coordinated with various banks and a scheme had been prepared by the State Bank of Pakistan (SBP).
The Finance Division recalled that the federal cabinet in its decision made on March 17, 2023 had approved the winding down of SME Bank, which was being implemented by the central bank.
It was pointed out that the federal government had appointed Tahir Hassan Qureshi as the president and CEO of SME Bank on the recommendation of the SBP for a period of three months or until the completion of the winding down process, whichever was earlier, in a decision dated August 6, 2023. His term ended on November 27, 2023.
Subsequently, the cabinet approved in January 2024 an extension in the term of Qureshi for three months or till the completion of winding down, whichever was earlier. However, Qureshi, through a letter dated January 30, 2024, submitted his resignation owing to “personal constraints”.
The cabinet was informed that the SBP recommended the appointment of Qasim Nawaz (ex-executive director SBP) as the president and CEO of SME Bank for handling its winding down. The SBP suggested that Nawaz may also be nominated as the official liquidator once an application was filed in court for the closure of the bank.
In terms of Section 11(3)(a) of the Banks (Nationalisation) Act, 1974, the federal government is competent to appoint the president of SME Bank in consultation with the SBP for a period of three years.
In view of the winding down of the bank, it was proposed that instant appointment be made for three months or till the completion of winding down, whichever was earlier.
It was stated that a package for regular and contractual employees was being considered by the Economic Coordination Committee (ECC) and the bank’s SME portfolio was being shifted to the National Bank of Pakistan (NBP), which was likely to be completed over the next three months.
Approval of the cabinet was solicited for the acceptance of resignation of Tahir Hassan Qureshi with effect from January 30, 2024 and the appointment of Qasim Nawaz as the president/CEO for three months or till the completion of the winding down process, whichever was earlier, as proposed by the SBP in terms of Section 11(3)(a) of the Banks (Nationalisation) Act, 1974 on a pay package mentioned in the annexure to the summary submitted by the Finance Division.
Published in The Express Tribune, April 18th, 2024.
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