BOP has strongly disagreed with a story published in a section of the press under the headline ‘Scam of billions of rupees under probe in KPK’, quoting Provincial Minister for local Government KPK Inayatullah Khan as saying that, along with many other banks, the Bank of Punjab had released heavy amount to the contractors against fake guarantees.

In response to the mentioned news clipping, the sources of the Bank of Punjab informed that it seems like the real facts were purposely distorted, and the worthy Minister of KPK was not briefed properly to this effect before he issued this statement in the provincial assembly’s session on Monday (24-02-2014).

The Bank of Punjab has also sent its reply to the State Bank of Pakistan upon the complaint of the Government of KPK informing that M/S Ideal Hydrotech Systems Pakistan Limited (IHSPL) entered into a contract with CDWA for installing a clean drinking water project at KPK, FATA & NAs. According to the terms of the contract, the company was to receive 30% as mobilization advance against bank guarantees. IHSPL approached BOP for issuance of two mobilization advance guarantees, which were issued for an aggregate sum of Rs 774.575 million as under with the paramount clause that, “The guarantees would be effective and operative as soon as the advance payment was credited to the account of the contractor No. CPA0050930016 maintained with the Bank of Punjab Main Branch, Lahore.”

Guarantee # BOP/2007/418, of 10/12/07 for Rs387.287 million valid up to 09-09-08. Guarantee #BOP/2008/245, of 15/04/08 for Rs.387.287 million valid up to 09-09-08.

The record reveals that KPK government released only Rs. 297.435 million against BOP guarantee # 418 through designated account of contractor at BOP while the remaining amount of Rs. 297.000 million was released in three tranches directly through Habib Metropolitan Bank and Atlas Bank now summit Bank in sheer violation of paramount clause of the guarantee.