Govt makes questionable appointment of NBP’s President

Special Report

The PTI government has made the questionable appointment of the National Bank of Pakistan (NBP) president.

The latest surfaced to this one is the President/CEO of the National Bank of Pakistan (NBP). The government made the country’s top public bank appointment by lowering the minimum education criteria from the same post’s previous two hirings.

Further, Arif Usmani, who is serving in the NBP now for almost two years openly tells his story of the appointment as President of the NBP in the staff’s gatherings that how then Finance Minister Asad Umar, who is still a cabinet member of the government-appointed him. According to video evidence in which Arif Usmani tells his appointment story narrating at the NBP Peshawar Region event on 12 March 2019 titling ‘2019Row the CRBG Boat’, ‘I know Asad Umar as I have served with his elder brother Munir Kamal in the Citibank.

Munir Kamal told me Asad is a searching banker, and I send a message to Asad, who responded to me quickly like a notice issued for the proclaimed offender that no action would be taken.

Asad started telling me about Public-Private Organization, etc. I told him that I don’t have any experience other than running a bank. Asad says he is also searching for president of the NBP, so please apply for it.

I have WhatsApp him my resume, on which he told me that I have to submit on a government website and shared the website address after someday, I was sitting in an office in Dubai when I started getting a call from Islamabad number like 05199. Initially, I ignored it twice and thrice. Still, when I attended the call, the callers asked me to come to Islamabad the next day. I asked the caller if he in his senses. I am not working in a retail shop (parchoon ki Dukan) to shut down and come. He couldn’t go to Islamabad and asked them could they interview on a phone call with the Finance Minister. So they arranged a video call with Finance Minister along with Dr. Ishrat, other people, and Razak Dawood, who didn’t stay as he has to attend some other board meetings.

I have 20 minutes conversation with Dr. Ishrat, and I am telling you the story as a reference as it is very recent, and it was a good conversation. It is his standard question that we have to promote SME, increase the outreach, etc., you know standard National Bank purposive life…….”.

Interestingly, the selection Board headed by Asad Umar, along with its member Dr. Ishrat Hussain and Razak Dawood shortlisted recommended the hiring of Arif Usmani place at the second number in the successful candidates and as a first choice in case of refusal from the first successful candidate who refused by giving personal reasons. The selection board ignored that Arif Usmani was not banking, finance, and accountancy graduate advertised in the advertisement.

According to the regulations, after the amendment in Bank Nationalization Act 1974 in 1997, government can appoint a President/CEO  as per law and procedure to run the bank’s affairs and to exercise powers and authorities vested under the law in force.

The Ministry of Finance (MOF) published an advertisement dated 30-09-2018 for President of NBP, and the advertisement states; “Finance Division requires the services of a dynamic and qualified full time professional for the position of President/CEO, National Bank of Pakistan (NBP) to be filled following Banks (Nationalization Act) 1974….”. Meaning thereby, at the time of application or determination of eligibility, all the criteria standards established in BNA 1974 should have been met.

The MoF fixed a Minimum Master Degree in “Banking, Finance, Economics, Business Administration, or related fields for the appointment of the previous two presidents of the (NBP). The government-appointed Iqbal Ashraf as President vide advertisement dated 17-09-2013. It also appointed Saeed Ahmed as President vide advertisement dated 09-01-2017.

The comparison of the advertisement shows the government relaxed the minimum qualification for President NBP in 2018. It successfully appointed Arif Usmani.

The educational criteria which were being maintained in previous advertisements dated 17-09-2013 and 09-01-2017 carried “Minimum Master Degree” in “Banking, Finance, Economics, Business Administration or related fields.” The same criteria further reduced to “Minimum Bachelor’s Degree and preferably Master’s Degree” in “Banking, Finance, Economics, Business Administration or related fields” in the advertisement dated 30-09-2018. However, Arif Usmani did not meet even this condition as he is a Physics graduate.

The selection board also floated the State Bank of Pakistan (SBP) Fit and Proper Criteria of State Bank of Pakistan to select a CEO candidate. Clause 4 (ii) c of Fit and Proper Criteria states that the candidate must have a bachelor’s qualification in banking, finance, Economics, Business Administration, and related field. So this criterion was flouted as Arif Usmani is a physic graduate.

The FPT criteria in the clause state that the candidate should not be involved in any fraud/ financial crime in Pakistan or elsewhere. The candidate must have integrity, honesty, and reputation.

However, Arif Usmani, allegedly involved in the Anti Money Laundry Case in 2003 in Nigeria while Managing Director of Citibank Operations in 2002, did not disclose it with the SBP.

Chief Spokesman State Bank of Pakistan Abid Qamar responding to the queries, stated: ‘Yes, SBP approved the candidature of Mr. Arif Usmani as President/CEO NBP after assessing his fitness & propriety in line with the requirements of Fit & Proper Test (FPT) Criteria. The SBP was not aware of his involvement in any money laundering case in Nigeria. SBP assesses the fitness and propriety based on prescribed information and documents provided by the bank. In terms of FPT Criteria, a President/CEO should have a minimum qualification of graduation. SBP’s FPT criteria do not specify any requirement for nationality for Presidents of banks. In this regard, the Federal Government ensures compliance with BNA while appointing presidents of public sector banks”.

Razak Dawood Version

Interestingly, Advisor to Prime Minister on Commerce, Textile, Industries & Production and Investment Razak Dawood, also a notified member of the committee that completed the NBP president’s hiring, disowned it. He said he was not part of a team to hire NBP President/CEO.

A senior official at the Ministry of Finance also said that he was not in the ministry when the government did the hiring process of NBP President. However, he insisted that the government did nothing wrong and followed all procedures. ‘I have seen the case’s file. There is no violation of the laws and procedure for hiring Mr. Arif Usmani as President/CEO of the NBP,’ he added. He said all the objections of dual nationality, money laundering case, and others were wrong, and he (Arif Usmani) also denied them.

President/CEO NBP Arif Usmani said that all allegations of money laundering were baseless and the result of his action taken against a non-performing bad-shaped leasing company during the service of the Divisional Head of the Citi Bank in Nigeria. “I looked after the operations of the six countries there and closed the business of a nonperforming leasing company.

He said that the company owner’s wife was a journalist/lawyer who launched a malicious campaign against him. He served in different countries, including Saudi Arabia, UAE, and Pakistan, after serving 16 months there. I got a fit and proper certificate from the State Bank of Pakistan (SBP) in 2008. I also got clearance for serving in the banks at the senior position like Chief Risk Officer in the second largest bank of Saudi Arabia from the Saudi and UAE departments concerned.

Usmani said if he involved in money laundering, then how the governments of these two countries cleared him.Furhermore,they allowed him to work at senior levels in the banks there.

Arif Usmani said that a group of bank officers started a campaign against him and went to the courts after starting clean-up operations in the NBP. He had terminated 5 EVP and 2 SVP following sheer incompetence, wrongdoings, and many other issues. He added that those people were now chasing him.

On the question of dual nationality, Arif Usmani said that he informed the committee about a travel document (passport) of Antigua & Barbuda, which was also surrendered.

About his education qualification, he admitted that he was theoretical physics as an Associateship of the Royal College of Science (ARCS), Imperial College of Science & Technology, University of London graduate. However, with over 40 years of banking experience, alongside teaching banking and accounts at 6 different Citibank world centers, I have acquired all accountancy and expert knowledge. Furthermore, I was in 2003 in the top 50 level-I Credit Officer of Citibank out of almost more than 200,000 bankers, he added.

On account of the performance of the NBP, he said the percentage of the NPLs of the NBP would also come down to other banks after separating the political loans from non-performing loans.

He said that PTI goverenment did not ask  for any loan while the political loans of Zardari of Omni Group are a major component of NPLs’,.

On the question of hiring human resources on a contract basis in violation of the Supreme Court orders, Arif Usmani said that he could not regularly hire while he has to deliver. But with the existing human resource delivery is impossible, they were hiring people on a contract basis under the salary range the Board of Directors of the NBP approved in 2015.

Furthermore, he admitted to hiring those people who previously served with him. ‘One trusts in competence and integrity of those whom he had served in the past. Since I come here for 3 years, I need a team to perform”, he commented.

Advisor to Prime Minister on Institutional Reforms Dr. Ishrat Hussain said they did not shortlist the final candidate. Rather, the ministry concerned completed this work.

However, he said that Intelligence agencies, including the IB and ISI, also gave clearance before hiring such a key position. Furthermore, the sponsoring ministry tables credentials before the cabinet meeting for final approval. So, it could not be possible that the issue of alleged money laundering remained unnoticed, and no one will raise a question on it.

Dr. Ishrat said that, surprisingly,  the issue is being taken up after almost two years of hiring. “I came to know about his alleged money laundering in Nigeria by you. Before, it was never in my knowledge. He said people go into litigations, but they never provided everything. This is why good quality human resources do not come to Pakistan to serve, he commented.

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On the appointment of a physics graduate against the advertised requirements, Dr. Ishrat said that it was minimum criteria. One having huge local and international banking experience could not be denied. In contrast, he has rich expertise and knowledge of banking.

Asad Umar headed the selection committee. He said that all the allegations were baseless as Mr. Arif Usmani was the second candidate on the successful list. The government has appointed President/CEO after the first selected person refused to join the NBP for personal reasons. Regarding money laundering allegations on Arif Usmani, Asad Umar said that he also served in the Middle East and Saudi Arabia. He already worked in Pakistan in 2008.

The laws and banking regulations in the Middle East are the strictest than anywhere globally, and one could not hide such money laundering cases there. Further, the SBP is responsible for giving the fit and proper test to scrutinize all these matters.