As we all know, Pakistan is passing through its most difficult economic phase. Things are drastically going wrong on the economic front. From depleting foreign exchange reserves to ever-increasing import bill, and from rising current account deficit to record foreign and public debts, not a lot of people are ready to give Pakistan a chance of rising from the debris of this unprecedented economic meltdown.
The same is the case with almost all of the government-owned entities. Whether it is the loss-incurring Pakistan Steels Mills or Pakistan International Airlines, things are getting murkier with no positive solution in sight for the resurrection of these national assets. Even the state-owned banks are in a grave situation despite making big bucks in the recent times. The biggest challenge they currently face is their inability to accept and face a future that is illuminated by the technological advancements, which have turned the field of banking into a highly tech-savvy battleground where no entity can survive without depending heavily on the latest technological solutions to their customers.
The National Bank of Pakistan is one of the state entities, which have enjoyed considerable growth in the past few years. The NBP reported a strong balance sheet growth of 20 percent in 2017 which supported its net interest income that ended flat during the year despite the lower net interest margins. In an analyst briefing in February this year, the NBP management attributed the growth to the commission on increased government transactions and higher trade volume.
The most important thing in the briefing was the future plan for the national entity. It was informed that the bank was focusing on improving its commercial and retail banking divisions by improving the overall services provided to the customers and introducing new consumer products. The National Bank of Pakistan is able to exist in a highly competitive sector, largely due to its status of being the official bank of the government. However, when it comes to competing with the technologically-advanced banks, the NBP lags way behind. Although, it has shown signs of improvement in the past few months as its information technology arm developed a branchless banking solution, which allowed its customers to avail banking and payment needs in a secure and convenient manner. The Habib Bank Limited was the latest private bank to offer a similar product to its customers, which shows that the NBP’s IT department is taking the bank in the right direction.
The National Bank of Pakistan has been in the news for all the wrong reasons in the recent times with its President Saeed Ahmed getting indicted in the supplementary corruption reference against former finance minister Ishaq Dar on April 5. NBP President Saeed Ahmed and two others are accused of helping Ishaq Dar in opening fictitious bank accounts to transfer money abroad. Mr. Saeed Ahmed was appointed by former Prime Minister Nawaz Sharif as NBP President on March 23, 2017. He was previously serving the State Bank of Pakistan as Deputy Governor since January 21, 2014.
There have been rumors in the industry that the NBP President is set to be replaced. The Federal Government on June 30, 2018, withheld its decision to remove Saeed Ahmed, for the time being. However, according to the industry sources, there have been six names in the reckoning to replace Mr. Saeed Ahmed after the Ministry of Finance presented a summary for the suspension of the NBP President for his alleged involvement in the corrupt practices. Among six possible replacements were Naheed Sultana, Rehmat Ali Hasnie, Shahid Saeed, Amir Sattar, Tariq Jameel, and Faisal Ahmed Topra. The names of Mr. Topra and Mr. Hasnie made rounds to get the provisional charge of the NBP President until a new president gets appointed.
As the competition is getting hotter in the local banking sector, the National Bank of Pakistan is living on a double-edged sword of keeping the highest standards of banking as well as adopting the latest technology to equip its existing and new products with the strength to serve its huge number of customers in the country efficiently. With the increased competition in the banking field, the time is now for the NBP to be led by a president who has his hand on the pulse of the ever-changing banking environment. A president who has all the bases covered when it comes to introduction and implementation of the latest technology which will go a long way in advancing the NBP into the challenging new era. If the NBP is to stay an active part of Pakistan’s thriving banking sector, it needs a leader who is fully equipped to enforce the latest banking trends.
All the remaining five possible contenders for the job of NBP President boast a strong profile. However, one common thing in most of the replacements is their similar background. They have risen from the same decades old system which has kept the NBP from taking the top flight over the years. However, SEVP/Group Chief Information Technology Shahid Saeed not only possesses knowledge of the conventional banking fundamentals but he is also well-accustomed with the latest technological trends and advancements in the international market. It is not a hard code to crack that the National Bank needs someone like him to carry the bank into the next era with an eye on the future requirements.
At the end of the day, it all comes down to two basic ingredients, i.e. the sheer knowledge and expertise of the banking system and the technological awareness and experience. The National Bank of Pakistan immensely needs someone who not only has the above-mentioned ingredients but also boasts a strong profile and a great reputation as banking professional. The willingness to adopt the latest banking trends will need someone right on top of the management who has all the information and experience with respect to the latest technology in the banking sector.
For the modern banks, the key aspects of an effective leadership are as crucial as industry expertise and technical skills. One of the famous management mentors, Peter Drucker put this one absolutely right when he stated, “Management is doing things right; leadership is doing the right things.” The time is now for the leadership to show up and do the right things so that the NBP has a President who is not only ahead of the industry trends but is also able to do the right things in a rapidly evolving banking sector. In fact, let’s make it a trend in all the state-owned Pakistani organizations including Pakistan International Airlines, Pakistan Steel Mills, and National Bank of Pakistan, etc. This would allow these national institutions to compete well with the private sector and are truly put back on the progressive trail.