Exclusive interview with Imam Bakhsh Baloch, SEVP & Chief of Audit & Inspection, National Bank of Pakistan

 Oct 31 - Nov 13, 2005

Education makes a people easy to lead, but difficult to drive, easy to govern, but impossible to enslave and that was what exactly the approach of Imam Bakhsh Baloch, SEVP & Chief of Audit & Inspection Group of National Bank of Pakistan, who was brought up in an environment full of tribal curbs in Punjgore.

Originally, PAGE had to interview Imam Bakhsh Baloch to speak on banking issues and the growth and development of the National Bank of Pakistan as the largest and the only bank left in the public sector, as he enjoys a senior position in NBP.

Though he has a sound and distinguished professional career studded with his achievements, and international exposure in the world of banking, but his early life and his struggle for education was more fascinating.

"I was born in Punjgor, a remote part of Balochistan, where people were not aware of the civic amenities. Governed by strong tribal rules and tradition, majority of the people had to go by the traditions set by the tribal chief. At that time electricity, road and telecommunication etc were strange to the people of Pungore," his eyes were peeping in the past. "I used to sit under the shade of a thick tree with kerosene lamp in the night hours to study my primary books. "What you will gain out of these books? These books do not portray the real impression of a Baloch, gun is the ornament which only suits to a Baloch youngman."

"I had to come across such remarks everyday, because even today the tribal society and tribal values do not appreciate the light of knowledge because it is the education which has the power to shatter the inhuman curbs of a rigid society," Baloch observed. "I firmly believe that education is more powerful than the tribal system," he said with a sense of achievement while enjoying a higher position in the banking profession.

Imam Bakhsh was of the view that education is the only way out to fight against poverty, diseases and crimes, especially in the province of Balochistan where people have to abide by the rules set by Sardars. Citing himself as an example, Imam Bakhsh was confident that serious efforts should be made to eliminate ignorance and alleviate poverty in Balochistan through the effective tool of education.

Coming back to the banking affairs, Imam Bakhsh appreciated the efforts of the State Bank of Pakistan for restructuring the entire banking mechanism in Pakistan. The banking reforms introduced by the State Bank have completely protected the banks from political influence or government interference for sanction of loans and advances. That was the reason that the size of the stuck up portfolios of the banks has been drastically reduced. Another reason for reduced size of inoperative loans and advances is the growth of economy on more sound footings. The word of bankruptcy had become a common feature of the economy. He recalled that there were times when banks have to come across the incidents of bankruptcy soon after disbursing the project loans. The economy has been made free from that virus.

Imam Bakhsh also appreciated Ali Reza, the President of National Bank for his untiring efforts and dynamic leadership to give NBP a prestigious and credible look among the banking community.

In the beginning when Ali Reza took over the charge as the President of NBP in 1999 the bank was not in a good shape. At that time the profits were estimated at Rs500 million which have taken a quantum lead to the level of Rs12 billion that speak itself about the quality of leadership that gave an edge to the NBP. The earnings of the banking may further go up to the tune of Rs13 billion at the end of the current year.

The working system of the bank has been entirely restructured in the tenure of Ali Reza. Change in the working culture is apparently visible. The outstanding results produced by the bank are entirely different from what they were used to be in the past. Under the new system, all zones were abolished, previously it had 9 regions, and the number of regions has increased to 29. Previously, a regional chief was responsible for the whole region. "But now we have earmarked specialized areas, for example, we have business chief, who is not involved in other areas of the banking business, operation chief responsible for expenses of branches, and he exclusively looks after the operational area. There is regional risk management, the chief of that area will be looking after the risk areas of the bank like credit portfolio and other risks. The bank has set up regional compliance mechanism, it is for the first time introduced in our bank, and this was again the initiative of Ali Reza. In fact distribution of work without interference from others is the basic theme of the reforms which have produced impressive results in all sphere of the National Bank," Imam said.

One of the most impressive results of these reforms introduced in the National Bank was attracting more clients from the private sector instead of depending on public funds or lending. Imam observed that prior to 1999, the financial strength of the bank was drawn 80 percent from the government funds and only 20 percent from general public. The situation has been reversed altogether. It was not an easy job to win the confidence of the private sector but the fact remains that now around 80 percent funds and lending is from general public while remaining 20 percent is from the government side.

We have targeted special projects. For example, advance salary is our own product. This product achieved a landslide success reflected in Rs38 to Rs40 billion advances disbursed under that product. It is repayable in easy installments and deducted through salaries that come through the bank

This is the most secure financing, it becomes infected in case of death only, otherwise it has proved the best product. Under this scheme 15 advance salaries are given to the approved applicants. The maxim amount disbursed under this scheme is Rs4.9 lakh, it is the secured financing.

NBP was also about to move into housing finance under the title of "Saiban".

NBP has a strong liquidity base and totally unique as compared to other banks. Generally speaking banks have not more than 15 kinds of transactions while the National Bank deals in more than 45 types of transactions. Mostly, the utility bills collections are done by the NBP. Earlier the fee of utility bills collection was merely Rs2 per customer and most of the banks avoid collection of bills due to unattractive price of collection. However, NBP continued to serve the people even at that low cost which has been raised now to Rs10 percent bill.

NBP is also planning to move into credit card business soon. "We have 1000 branches and we are working on the theme to make all of them to operate as online branches. NBP had 37 ATMs, now the number of ATMs rose to 104, which are regularly and actively monitored. All these efforts helped NBP a credible position amongst the community and that is why it has been rated number one bank in Pakistan by the Bankers Magazine London.


While expressing his deep sorrow and grief, Imam Bakhsh disclosed that 11 branches of the National Bank were collapsed while 14 staff members and seven clients died in the earthquake. The regular staff, contract staff and the clients present in the premises of the said branches lost their lives under debris of the collapsed structures.

The total loss of life is so far estimated at 21 which is a tragic loss to the country.

Almost all the branches damaged in the devastation have been put in working order. Initially, the NBP had announced Rs35 million for the relief fund but the amount was later enhanced to Rs100 million on the instruction of the president of the bank after seeing the magnitude of the disaster. Zonal chief visited Muzafarabad and NWFP and announced Rs5 lakh for each employee died in the incident and Rs2.5 lakh for each customer died within the premises.