Sources said Meezan Bank will convert the conventional operation of HSBC into Islamic mode and before merger, the Shariah Supervisory Board of Meezan Bank has approved general guidelines for conversion of a conventional bank''s operations into Shariah-compliant operations.
According to a circular No BPRD (R&P-02)/2014/19607, in exercise of the powers conferred on it by clause (b) of Sub-Section (2) of Section 37 of the State Bank of Pakistan Act, 1956, State Bank of Pakistan is pleased to direct the de-scheduling of HSBC Bank Middle East Limited (HBME Branch Business) effective at 11:59 pm on October 17, 2014, on account of its merger with and into Meezan Bank Limited, in terms of the sanction order dated September 22, 2014, issued under Section 48 of the Banking Companies Ordinance, 1962.
Meezan Bank has vast experience of acquiring a foreign bank and accordingly converting operation into Islamic Banking. In 2002, it acquired the banking operation of Societe General in Pakistan and through a transaction very similar to current transaction.
In April 2012, under the restructuring plan Hong Kong and Shanghai Banking Corporation (HSBC) planned to sell out its stakes in the Pakistani financial market. Earlier, it signed a sale purchase agreement with JS Bank, however the deal was lapsed in October 2013 as, reportedly, JS failed to manage to secure regulatory approval for the purchase.