Islamabad:
The government has drawn up a plan to provide affordable credit facilities to small and medium enterprises, which are considered a vital part of the economy and provide a large number of job opportunities.
The matter was discussed in a recent cabinet meeting while discussing acceptance of resignation submitted by SME Bank Limited Chairman and Managing Director Tahir Hassan Qureshi and appointment of a new person at the helm.
During the conversation, the role of small and medium enterprises (SMEs) in the development of Pakistan’s economy through the provision of affordable credit was discussed in detail.
Cabinet members considered the need for an alternative SME-centric financing structure modeled on other developing countries.
It was explained that on the instructions of the Prime Minister, the Finance Directorate had coordinated with various banks and a plan had been prepared by the State Bank of Pakistan (SBP).
The Department of Finance recalled that the federal cabinet in its decision taken on March 17, 2023 had approved the liquidation of SME Bank, which was implemented by the central bank.
It was pointed out that the federal government has appointed Tahir Hassan Qureshi as the Chairman and Managing Director of SME Bank on the recommendation of SBP for a period of three months or till the completion of the liquidation process, whichever is earlier, by decision. dated August 6, 2023. His term expired on November 27, 2023.
The cabinet then approved in January 2024 an extension of Qureshi’s tenure for three months or until the completion of the liquidation, whichever was earlier. However, Qureshi, through a letter dated 30 January 2024, tendered his resignation due to “personal constraints”.
The cabinet was informed that SBP has recommended the appointment of Qasim Nawaz (former executive director SBP) as chairman and managing director of SME Bank to manage its liquidation. The SBP suggested that Nawaz may also be appointed as the official liquidator once an application is filed in court to close the bank.
Under section 11(3)(a) of the Banking (Nationalization) Act, 1974, the federal government is empowered to appoint the chairman of SME Bank in consultation with the SBP for a period of three years.
In view of the liquidation of the bank, it was proposed to make an immediate appointment for three months or till the completion of liquidation, whichever was earlier.
It was reported that a package for regular and contract employees is being considered by the Economic Coordination Commission (ECC) and the bank’s SME portfolio is being transferred to National Bank of Pakistan (NBP), which is likely to be completed within the next three months.
Cabinet approval sought for acceptance of resignation of Tahir Hassan Qureshi with effect from 30 January 2024 and appointment of Qasim Nawaz as chairman/CEO for three months or till completion of liquidation process, whichever is earlier; as proposed by the SBP under section 11(3)(a) of the Banking (Nationalization) Act, 1974 in respect of a remuneration package mentioned in the annexure to the summary submitted by the Finance Directorate.
Published in The Express Tribune, April 18u2024.
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