KARACHI (February 26 2003) : The merger of Pakistan Industrial & Investment Corporation Limited (Picic) with the Picic Commercial Bank (PCB) has not been shelved but would take place within the timeframe of governmental policy to equate the tax rate on banks with other corporate entities, according to sources of the Picic Board of Directors.
As an investment bank, Picic is subjected to 35 percent tax on its income while the Picic Commercial Bank falls in the tax bracket of 50 percent.
Since the banking licence issued by the State Bank is considered to be of high value, Picic as an institution would ultimately merge with the Picic Commercial Bank, say knowledgeable sources.
The Managing Director Picic, Mohammad Ali Khoja, will step down from the chairmanship of the Picic Commercial Bank to pave way for Taufiq H. Chinoy, however, he would continue to remain the Director on the Bank board as 60 percent shares are held by Picic in the Bank.
This move is in accordance with the SBP policy that the same person cannot head two financial institutions.