MR. SAFAR ALI KARAMALI
LAKHANI was born on 12 September 1940. He had a desire to become
an engineer but due to some domestic circumstances, he had to forgo this
idea. He did his B.Com in 1962 from Sindh University. In 1976, he
acquired D.A.I.B.P. from the Institute of Bankers in Pakistan. 1982 was
the year when he completed his L.L.B from Karachi University. He has an
extensive experience of working in different banks on junior to
executive positions. He has attended International Banking Seminars at
New York, Athens, Switzerland and at Howard University Bostan USA.
Having served in Habib Bank Ltd as a Senior Executive Vice President
& General Manager for East & Pacific Region based in Singapore
controlling Habib Bank's operations in 11 countries, he is now rendering
his services as President & Chief Executive Officer to Soneri Bank
since the establishment of the bank in 1992.
us about how were you brought up, your education and achievements in
What ever I am today is because of my parents. All credit goes to them.
My father was running a business but after Martial Law, he started
facing some problems in his business. I did my Matric in 1955. I wanted
to become an engineer. When I came in 2nd year, my domestic conditions
were not favorable for me to go for engineering, I hoped for better
financial conditions for the family but that didn't happen. I finally
decided to do a job along with my studies and got my admission in
inter-commerce. Then I did my B.Com and joined banking in Hyderabad as a
junior clerk on salary Rs. 105. I worked for 6 years in National Bank of
Pakistan in Hyderabad and then got transferred to Karachi. My father's
income was not enough to support my siblings, so I had to share. In
1966, I joined Habib Bank where I kept working till 1991. My last
posting was in Singapore as Senior Executive Vice President &
General Manager for East & Pacific Region controlling Habib Bank's
operations in 11 countries. Currently I am serving Soneri Bank as
President & Chief Executive.
frequently use the term "BANK" in our daily lives, but most of
us don't exactly know the correct definition of the term. Some say it is
just a financial institution, while others believe that it is an
institution that deals in money. Can you please define the term BANK
comprehensively for our Citizens?
Bank is an institution where surplus or saved money is deposited and
lended to the people in need for commercial purposes. Let's say you have
some amount of money deposited in a bank; a person who has a business
but no money applies for a loan. He doesn't know you but you and he
trust the bank. The bank will give your money with some percentage of
profit to the person who has applied for the loan. First the bank would
investigate whether he will utilize the money properly or will waste it.
After assurance the bank will lend this money to that person. He will
put this money in his business and will yield profit and generate
employment and simultaneously the bank and the people whose money is
deposited in the bank will get benefit as well. The basic purpose of the
bank is to serve the society to create the employment, production and to
safeguard the savings of the nation.
can we distinguish/differentiate between retail and consumer banking?
Consumer is a new terminology that has come in Pakistan in last 4 or 5
years. Retail banking is a type of banking in which banks generally give
advantage to the commercial sector. The bank gives money to you if you
are running a small shop, factory or a restaurant is called retail
banking. But when bank gives money for consumer purposes like if you
want to buy a TV or any consumer product, it is called consumer banking.
This idea has recently been introduced in Pakistan.
It is the first time in Pakistan that we have got
excess liquidity in banks. It means there is more supply than demand of
money. When there is more supply, the bank's income is bound to go down
if not reemployed to earn income on it. Therefore, investment in
consumer banking generates better earning than traditional banking.
is said that exports of a country are supported by its sound banking
system, how is it done?
S.A. LAKHANI: Correct,
bankers who are handling exports must have the know-how of the export
trade. The bankers who are dealing with exports should have contacts
globally. My bank can't export unless I have banking relationship with
international banks, which is called "Correspondence
Relationship". The services being provided by banks today to
exporters are vital for the exports of a country.
Present government's efforts for exports are
commendable. If you are an exporter and want to borrow from the bank,
today it's so easy only at the rate of just 4% per annum, which is
almost nothing. It was too difficult 10 years back. Government. wants to
encourage the exporters to export more because when the exports are
high, it will bring prosperity and earn foreign exchange for the
was the aim behind establishing Soneri Bank since there already were
enough private banks running? How far have you been successful in
attaining your objectives?
S.A. LAKHANI: This
bank was established by Rupali Group and it is brain child of Mr.
Badruddin Feerasta. There was no private bank in the country till 1992
as in 1974 all private banks were nationalized and only foreign banks
were allowed to operate. When Mr. Feerasta came to Singapore where I was
working in Habib Bank to engage me for Soneri Bank, I put him question
why do you want to establish a bank? His reply was that when he had no
money and he wanted some facility from a bank, he had to follow a bank
for six months, he said I want to establish a bank where customers
especially small and medium are attended immediately and Yes or No reply
is given. To guide them and to help them by making quick decisions was
the basic idea of the bank. Now we are tying to follow his footprints
and the reasons for our success are quick decision to attend the need of
our customer. Our bank's slogan is "We have more time for
Trust and confidence of the consumers is the key to success for any
bank. What are the main problems that the local Pakistani Banks are
facing from the international banks like Citibank, Standard Chartered
bank, ABN AMRO bank, etc.?
S.A. LAKHANI: A
very good question indeed! The ground reality is that if anything is
made in USA or Europe, we'll always appreciate it. Secondly the foreign
banks have edge in technology. These banks are connected globally
through network of branches all over the world. Local banks don't
possess these expertise. But another fact is that we are friendlier than
they are with the customers. They say they charge 9% but when you
calculate it is 13%. When we (Local banks) say 9%, we mean 9%. They
started house loan with 22%, we started it with 13% and now our rates
are 11% whereas even today their rates are between 13 to 14%. They
generally cater to a specific category of customers like corporate and
multinational. We serve every common man of Pakistan.
there any rationale of motivating people for savings, when vast majority
of Pakistanis are unable to meet financial requirements?
Fortunately yes and unfortunately no. At present interests/profit rates
are going down. One year ago, my bank was paying profit at the rate of
10% on savings deposit, which we have now reduced to 4% whereas other
large Pakistan banks are giving only 2. 2.50% profit. This is not good
for the country for domestic saving, but globally there is a surplus
liquidity at present. The trend all over the world is to bring interest
rate down just to push more industries and investments in the country.
When there will be more investment demand for money will exceed to
supply and rates are bound to increase. I agree, at present there is
hardly any incentive to save.
you are made the Prime Minister or Federal Minister of Finance, what
economic or financial steps will you take to bring Pakistan among the
community of economically prosperous nations of the World?
Laughingly, neither I am eager for this position nor do I feel myself
fit for this position. I personally believe that the current Prime
Minister & Finance Minister are going in the right direction. The
government. policies are very conducive for the country. First they
tried to give attention to the macro economy, to make it sound and
strong. They have consolidated and privatized the business that is a
fruitful decision and work is still going on. People ask what benefit a
common man will get from this 10 billion dollar foreign exchange
reserve. If economic conditions would not have improved and rupee would
not have appreciated from Rs. 64/ & Rs. 58/- the Dollar value might
have shoot up to 80 or 100 rupees, the electricity, gas rates &
petroleum prices would have increased and employment conditions would
have deteriorated than present. So it would have affected all of us
directly or indirectly. It has given us a standing in the committee of
nation. In past we used to be one tranch or rather begger country but on
account of sound policies of present government. we have come out of
death trap. I suggest them to pay attention to micro economy. Micro
economy means to look after the problems of common man like you and me.
A part of accumulated foreign exchange can be invested in infrastructure
projects to generate employment. We must also appreciate the
introduction of consumer banking trend. In consumer banking when there
will be more demand of the products like TV & Refrigerator, more
industries would come up and things will become cheaper and employment
will be generated.
we implement Islamic Banking in Pakistan with all its aspects?
Unless you find the solution to the present problems, transition to
Islamic Banking is not possible completely. Present government. has the
policy to allow 2 or 3 specialized Islamic banks and to allow banks to
have separate Islamic Banking branches is the right solution than
converting whole banking industry to Islamic banking. People have the
choice where to go, nobody can compel them. Once Islamic banking gets
mature, it will be easier to convert other banks to Islamic Banking.
Quite a few people are prepared to go to Islamic Banking but the present
knowledge and research are not sufficient enough to shift immediately to
the Islamic Banking. This mistake was committed by the past government.
but it so happened that the money which was available at 12 to 14%, went
to 18%. Unless you experience it for next 5 to 10 years and are
satisfied, 100% shifting to Islamic Banking would be a big risk for the
is the basic difference between the operations of Private banks and Govt
Private banks are accountable to the share holders and responsible to
the depositors. Government. banks are only responsible to the government
and government. has the bureaucracy where hardly anybody is accountable.
So the people in government. banks are found little irresponsible &
lethargic, whereas working in private banks is a very responsible job;
you serve the common man and you have to be cautious because you might
be accountable in case of any mishap.
would like to have your comments on the work done by Kalia Group to
endorse Information Technology in the country.
S.A. LAKHANI: They
are very nice and friendly people as far as commitments are concerned. I
am glad to see the way they are working towards the betterment of
Information Technology in the country through their website (KalPoint.com)
and through other services for the nation. I wish them very best of luck
and pray for their accomplishments in their future endeavors.
Which category of KalPoint did you like most?
S.A. LAKHANI: I
am a regular visitor of www.KalPoint.com. Every category concerns to the
need of every individual of the country. I would like to appreciate your
employment www.jobspk.com category. The efforts put into this category,
are really praiseworthy in the current alarming conditions of
un-employment in the country, both employers and un-employed are
provided opportunity to interact and I congratulate all of you for
introducing this service.
message would you like to give to our citizens and younger generation?
Only make your mission to work hard. Never rely on Sifarish, believe on
merit only, and the future is yours.
Q: What are
your comments on the privatization policy of the government? Do you
think that it is good for the country and the economy as a whole? (Rustam-Multan)
I think it is good for the country and the economy as a whole, because
this will create competition, create new employment, new products etc as
the government cannot look after everything and it is not government's
job to run banks and industries.
Q: How the
banks can help in reducing poverty from the Country?
S.A. LAKHANI: Banks
are doing a lot in this sector. What services they provide to their
clients for the manufacturing sector, the production sector or the trade
sector, the main idea is to employ funds to generate income and create
more employment opportunities.
Q: Can we
compare Pakistan's inflation ratio & parallel economy to that of
other countries like India and Sri Lanka?
S.A. LAKHANI: I
think the inflation rate of Pakistan as compared to India is almost the
same but Sri Lanka's inflation is more. Our inflation rate is 3-4% same
as that of India, there is not much difference. For the past 3-4 years,
government. economic policies have shown results. As regards the
parallel economy is concerned this is a common problem in almost all
developing countries whether it is India or Pakistan, but with strict
money laundering laws and "Know your Customer" instruction by
State Bank of Pakistan will gradually eliminate the parallel economy.
Q: Does Soneri
Bank has any loan offers for students willing to study abroad?
S.A. LAKHANI: No,
Soneri Bank doesn't have such loan offers till now, but we surely plan
to have it in the near future, InshAllah.