Daily Times

ISLAMABAD: Instead of choosing the best ranked commercial bank, Quaid-e-Azam University (QAU) deposited Rs 160 million in the lowest ranked commercial bank in the country, Daily Times has learnt.

The amount of Rs 160 million was purely of endowment funds that is the saving of the varsity while as per rules the actual amount would remain intact and the profit on this amount may be spent on scholarships, development, and many other development projects in the varsity.

According to available documents, the QAU in 2015 deposited the amount in the Dubai Islamic Bank (DIB) Sector G-9 Markaz Islamabad, for a three- year time period and the bank is the lowest in the rating as compared to other banks which submitted quotations with the varsity mentioning their investment rates.

According to the world’s best bank rating agency Moodys, the bank which holds ‘AAA’ is considered “Prime” while the bank which has a score of ‘AA’ is of “high status”. And the bank which has ‘A’ is included in the upper medium category. The DIB has A grade, while other two banks, HBL and Askari Bank Limited (AKBL) have ‘AAA’ and ‘AA’ scores respectively.

Moreover, the profit rate on the deposited amount in the selected bank by the varsity administration is also not so significant as compared to the other couple of banks. The statements of three banks submitted to the QAU treasury which is concerned about the financial matters of the varsity, the copies of these statements obtained by this scribe, revealed that profit ratios offered by the DIB were not so significant when one compares them to the other banks.

According to the submitted statements, the AKBL in three banks, offered the highest amount for the annual and three years’ profit. The bank offered Rs 30.562 million profit amount for three years’ tenure, and the HBL stands second as it offered Rs 26.670 million for the depositing amount by the varsity. As per DIB policy the ratio of withholding tax on the depositing amount is also high than the other two banks.

Moreover,the DIB in a letter written to the varsity management did not assure about the offered profits.

“Being an Islamic Bank we cannot guarantee profits against your investment with us. However, based on the aforementioned profit distribution procedure it is expected that the customer may earn 7.3 per cent per annum against investment in the Mudaraba pool”, reads the letter of the DIB.

The documents read that the treasurer in his notes forwarded to the QAU vice chancellor Javed Ashraf, prohibited him from depositing the said amount with the DIB. “Ashraf did not take into account the treasurer’s suggestions and did as per his own interests”, an insider claimed.

As per the QAU bylaws no investment could bw made without the formal approval of the varsity’s in-house Investment Committee (IC) that includes a senior professor, all deans and some other officials as its members.

The insiders disclosed that due to some differences with the investment committee members, VC Ashraf did not take into account the IC. Instead, he put the matter before the endowment committee. Interestingly this committee member (treasurer) also did not favoure the investment in the DIB, added the officials.

Furthermore, the AGPR in his report also discouraged the agreement with DIB. The report stated that the investment was made against the Finance Division’s instructions. According to the instruction the Finance Division had directed that the investment should be made with a bank under the new policy which says three least independent banks should take compete on the open bid.

It was said in the AR that beside the Finance Division, the varsity administration also did not consider the IC and the Syndicate — the apex decision making body of the university. When contacted for his version VC Ashraf said that “I am busy in an important meeting and will respond to you in a while”, but he did not respond later.