ISLAMABAD: Justice Amir Farooq of the Islamabad High Court (IHC) restrained the State Bank of Pakistan from offloading the KASB Bank.

On November 14, 2014, in order to protect the interests of depositors and other stakeholders and due to weak financial health and other circumstances of KASB Bank Limited, it was placed under a moratorium for a period of six months.

The Federal Government also directed the State Bank of Pakistan (SBP) to consider reconstruction or amalgamation of the bank as per the provisions of the Banking Companies Ordinance, 1962, within moratorium period.

The court passed the restraining orders after some investors including Chinese and Pakistani businessmen challenged the amalgamation of the bank.

The petitioner adopted before the court that the federal government had engaged certain company for the evaluation of the assets of the bank and they kept some serious investors out of the bank’s sale process.

The petitioner claimed that if the merger of the bank was not stopped, over 2,000 employees working in 105 branches might lose their jobs.

After initial hearing, Justice Farooq issued notices to the SBP and the federal government and restrained SBP “from executing amalgamation/reconstruction” of the KASB Bank till the next date of hearing on February 24.

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