Pakistan: HBL-01

Date Filed
03 Apr 2022
Status
Open
Phase
Compliance
Country
Pakistan

Case Tracker

Eligibility
April 03, 2022-April 22, 2022
Eligibility
Assessment
September 07, 2022-January 13, 2023
Assessment
Dispute Resolution
Compliance
Appraisal
Status as of January 13, 2023
CURRENT Status
Appraisal (COMPLIANCE)
Status as of January 13, 2023

Complaint Overview

Complainant

A former HBL employee.

Concerns

Unfair dismissal, non-compliance with IFC Performance Standards, unauthorized dismissal, malfunctioning of the company's whistleblowing mechanism. 

Cross-Cutting Issues
Industry Standards and Certifications Labor

Project Information

Region
Middle East
Institution
IFC
Name & Number
HBL Project - 34365 (IFC)
Company
Habib Bank Limited (HBL)
Sector
Financial Markets
Department
Industry Department - Financial Institutions Group
Category
FI
Commitment

IFC’s commitment to this project comprises of a straight senior loan of up to US$150 million to Habib Bank Limited (HBL) including a loan of up to US $86 million for IFC’s account (an A-loan), and a loan of up to US $64 million from IFC acting as an implementing entity for the Managed Co-Lending Portfolio Program (MCPP)—project number 34365.

 

Synopsis

Project Overview

Habib Bank Limited (HBL) is considered one of the largest private-sector banks in Pakistan, with nearly 1,600 branches and auntomatic teller machines in Pakistan, and a presence in over 25 countries including subsidiaries in Africa, Asia and Europe. The Aga Khan Fund for Economic Development (AKFED) holds 51% of the bank’s shares. According to HBL, the remaining shares are held by individuals and domestic and international institutions and funds including CDC Group Plc which holds 4.99% and International Finance Corporation which holds 0.87%.

This IFC project includes a straight senior loan of up to US$150 million to Habib Bank Limited (HBL) targeting small and medium enterprises —project number 34365—. The loan was set up to support the bank’s domestic and international growth under specific segments including rural and agriculture finance, women ownedand operated businesses, and sustainable energy finance. IFC expects that the project will offer development impact in Pakistan through these segments including via private sector development and the promotion of environmental and social management. The objective of the loan is also to offer diversified funding sources to the bank, strengthen its capital adequacy, and to expand its lending activities.

This project also involves a related advisory services project—project number 603761—the Enabling Sustainable Banking in Pakistan project. Its goal is to increase the share and volume of bank loans screened against improved Green Banking Guidelines, improve the bank’s awareness and understanding of environmental and social risk management, and increase the number of intermediaries to provide environmental, social, and governance training to banks after IFC exits the project.

 

Complaint

The complainant is a former employee of HBL whose position was Deputy Deputy General Manager and Head of Planning and Implementation of HBL’s Social and Environmental Management Systems (SEMS) unit.

The complaint raised concerns regarding HBL’s alleged non-compliance with national and international environmental and social (E&S) standards, including IFC’s Performance Standards. The complaint also raised concerns related to the complainant’s alleged unauthorized dismissal as Deputy General Manager and Head of Planning and Implementation of HBL’s SEMS unit. Finally, the complaint raised concerns around HBL’s alleged mismanagement of its whistleblowing mechanism.

CAO Action

CAO received the complaint on March 3, 2022, and found it eligible for assessment on April 22, 2022. At the request of the complainant, the complaint was referred to IFC in accordance with paragraph #39 of the CAO’s Policy.

On August 17, 2022, the complainant requested for the complaint to be referred back and end engagements with IFC. CAO’s assessment formally began on September 7, 2022.

In January 2023, CAO completed its assessment. During the assessment process, both parties expressed no interest in engaging in a CAO-facilitated dialogue process. Consequently, the case will proceed to a compliance appraisal.

Status

In January 2023, CAO completed its assessment. During the assessment process, both parties expressed no interest in engaging in a CAO-facilitated dialogue process. Consequently, the case will proceed to a compliance appraisal.

Note: The CAO assessment process does not entail a judgment on the merits of the complaint; rather, it seeks to understand the facts and empower those involved to make informed decisions on how to address the issues raised.

Status as of January 13, 2023

Case Documents

  • Complaint & Assessment

    Complaint
    Complaint: Pakistan HBL-01.pdf
    Mar 04, 2022
    English
    Complaint: Pakistan HBL-01.pdf
    Assessment Report(s)
    CAO Assessment Report - Pakistan: HBL-01
    Jan 13, 2023
    English
    CAO Assessment Report - Pakistan: HBL-01