Related topics

Pakistanis Take Bank Collapse Personally

August 4, 1991

KARACHI, Pakistan (AP) _ Pakistanis took pride in the Bank of Credit and Commerce International, founded by a countryman. When BCCI collapsed, branded as the world’s most corrupt financial institution, they took it personally.

Only 60,000 Pakistanis actually deposited their savings in BCCI, the brainchild of financier Agha Hasan Abedi, but they were proud of its prestige and rapid growth. BCCI’s success became their success.

Last month, the empire crumbled in a blizzard of charges: massive fraud and theft, brokering clandestine arms deals, laundering drug money and supporting a Mafia-style network of torture and terror.

Reaction from Pakistanis was swift and bitter.

It was not the first bank accused of criminal activity, they said. This was just another attempt to keep the Third World dependent and Muslim countries subservient to the powerful, industrialized West.

″There is no doubt that racism played an important role in the seizure of BCCI,″ said Khurshid Hadi, a Karachi accountant and customer of the bank. He said it ″grew too fast, to the suspicion of other Western financial agencies.″

Response has been muted from the conservative Islamic government and its normally outspoken opponents, led by former Prime Minister Benazir Bhutto.

Newspapers have claimed Ms. Bhutto’s family lost $10 million deposited with BCCI in London. She denies it.

″I was warned in 1989 not to have any dealings with BCCI,″ Ms. Bhutto said. She would not elaborate.

The Finance and Defense ministries are conducting separate investigations of BCCI operations in Pakistan, focusing on allegations that the bank laundered drug money and acted as a conduit for covert CIA aid Afghan insurgents.

Government officials refuse comment on the investigations.

Sentiment against the West, particularly the United States, always runs just below the surface in this Islamic nation of 120 million. It bubbled up when the United States cut off economic and military aid in October, and again during the Gulf War.

Even among the educated elite, normally sympathetic to the West, there are suspicions that BCCI was punished for intruding on territory dominated by the giant American and British multinationals.

″With one stroke, they have smashed the biggest Muslim-Asian bank,″ said analyst Ejaz Hanif. ″They have left its employees jobless and ruined its customers. The plight of BCCI will prove a deterrent for ambitious Third Worlders to not dare dream of getting ahead of First World interests.″

Abedi dreamed of creating a bank that could help the Third World break the shackles of poverty and backwardness, gain self-respect and become self- reliant.

When BCCI opened in 1972, it was staffed largely by South Asians who understood the customs, culture and the religious traditions of the Third World.

It offered easy credit and high interest with few questions, gave quick service to both ordinary people and the rich. It made loans to small businessmen other banks rejected, operated in remote, backward regions and poured millions of dollars into charities and development projects in the poorest countries.

″BCCI was more efficient than other banks,″ said Muzaffar Ali, a Karachi industralist. ″I could go to a bank official at any time and the work would get done. The other multinational banks were not easy to deal with.″

Pakistanis could maintain accounts in BCCI branches outside the country. Banking officials said they deposited the equivalent of about $30 million every year, much of it illegal income.

″Hundreds of Pakistani officials and businessmen deposited their money from kickbacks in accounts outside the country to avoid paying taxes,″ one said, on condition of anonymity.

Most BCCI operations have shut down since the Bank of England, alleging massive fraud, closed it in early July and seized its assets.

A New York grand jury later indicted BCCI, four affiliates, Abedi and a one of his former deputies on charges of fraud, embezzlement and falsifying records.

Branches in Karachi, Islamabad and Lahore still operate, but under strict regulations imposed by Pakistan’s central bank. Depositors are allowed to withdraw only 20 percent of their money, to a maximum of $4,000.

Update hourly