Chapter 23: Entering the Banking Sector
The early 2000s were a turning point not just for Dewan Group, but for Pakistan's evolving financial landscape. After expanding aggressively in automobiles, textiles, and cement, Dewan's leadership turned its sights to the banking sector — the very heart of economic control. The idea was not impulsive; it was strategic, and as always, it was led by Dewan Yousuf Farooqui, the industrial patriarch known for his relentless ambition.
The banking industry in Pakistan was undergoing liberalization. The government, under General Pervez Musharraf's rule and with Shaukat Aziz as Finance Minister and later Prime Minister, was encouraging private sector growth and financial inclusion. Large conglomerates were incentivized to own stakes in banks to promote competition. However, it was also a dangerous game — one that mixed money, politics, and influence in volatile proportions.
Scene 1: The First Meeting of Intent
In 2001, a private meeting was held at the Pearl Continental Hotel in Karachi. Dewan Yousuf, accompanied by his trusted legal adviser Wajid Hassan and financial strategist Abdul Rafay, met with representatives from the State Bank of Pakistan (SBP).
Yousuf Farooqui leaned forward, voice calm but determined. "We have the infrastructure, the reach, and the credibility. What we need now is a financial vehicle. A bank that works for the industry — not just the elite."
The SBP official, Syed Rehman, looked skeptical. "Mr. Farooqui, the central bank has to maintain regulatory neutrality. You're proposing to acquire an existing banking license — which one?"
Yousuf didn't flinch. "We're eyeing Saudi Pak Commercial Bank."
That name sent a small wave of surprise through the room. Saudi Pak was mid-sized, with deep roots in foreign investment and a clean record — the kind of bank the State Bank wouldn't want to destabilize.
Rehman replied cautiously, "You're aware of the scrutiny that will come with this. The State Bank will monitor every step."
"I welcome the scrutiny," Yousuf replied. "We aren't stepping in to exploit. We're here to lead."
Scene 2: The Acquisition
By 2002, Dewan Group acquired a controlling stake in Saudi Pak Commercial Bank (SPCB) through a complex financial structure involving Dewan Mushtaq Group and Dewan Salman Fibre. The acquisition raised eyebrows across the corporate sector.
Dewan renamed it "MyBank Limited" — a clear branding attempt to reflect a modern, personal, and accessible image. He appointed Danish Farooqui, his younger cousin educated in banking from London School of Economics, as Executive Director.
Scene 3: Behind Closed Doors
In a closed-door meeting with his board members, Yousuf outlined his plan.
"We will move aggressively into SME lending, offer attractive car financing, and launch Islamic banking. I want branches in every major city within two years."
Board member and former Habib Bank senior executive, Tauseef Siddiqui, raised a cautionary note. "Expanding too fast can be dangerous. Also, rival banking groups won't sit quietly. Especially those with connections to the Chaudhrys of Gujrat and the Haroons of Dawn Group."
Yousuf smiled. "We aren't here to play quietly. We're here to dominate."
Scene 4: Conspiracies Unfold
As MyBank began expanding, conspiracies began brewing. Rumors were rife that major banks such as MCB (owned by the Mansha Group) and Allied Bank (with its roots in the powerful Ibrahim Group) were lobbying the SBP to introduce stricter capital adequacy requirements. The goal was clear: slow down MyBank's rapid expansion.
A leaked memo from a senior SBP executive read:
> "Unusual growth in branch expansion and car financing by MyBank must be reviewed. Recommend thorough audit under Basel II guidelines."
Basel II, a global banking regulatory framework, had just been introduced in Pakistan. While it aimed at strengthening risk management, it also became a tool of pressure. MyBank was forced to slow down, divert capital, and focus on compliance instead of growth.
Scene 5: Political Tensions Rise
In 2004, during a dinner hosted by Karachi Chamber of Commerce, Shaukat Aziz, then Prime Minister, had a side conversation with Yousuf Farooqui.
Shaukat Aziz said, "The economy is on a roll, Yousuf. You've played your part. But remember — banking isn't like cement or cars. It's political."
Yousuf raised his glass. "So is business, Prime Minister. And I've learned both in your company."
The subtle tension wasn't missed. There was growing suspicion that Dewan Group had become too powerful. MyBank was seen as more than a bank — it was an economic lever.
Scene 6: The Clash with MCB
In 2005, Dewan Group attempted to launch a credit card service tied to its automotive division, offering car discounts, fuel incentives, and zero-percent financing.
MCB filed a regulatory complaint, alleging anti-competitive behavior.
At a meeting with the Competition Commission of Pakistan (CCP), Mian Muhammad Mansha, owner of MCB, stated:
"This is not innovation. This is monopoly-building. They are using banking to cross-subsidize their auto sector."
Yousuf responded sharply:
"We aren't cross-subsidizing. We are integrating. Isn't that what visionary economies do?"
Scene 7: Financial Storms
By 2006, Pakistan's banking industry was feeling the tremors of global economic shifts. MyBank, like others, faced liquidity issues. Dewan Group's over-leveraged position became exposed. They had borrowed heavily to fund expansion, including the textile mills, cement factories, and now, banking.
Internal audits revealed cash flow mismatches. MyBank's car loans had a default rate rising to 9%, double the industry average.
A whistleblower within MyBank leaked a document showing that inter-company loans were being issued without board oversight. The scandal reached the media.
Scene 8: Damage Control
In a high-stakes boardroom meeting, Danish Farooqui, looking visibly tense, addressed his team:
"We have two weeks before the SBP orders a special audit. Get the books clean. Cancel all future lending to internal group companies. Focus only on SME and retail clients."
"But what about the Group's funding needs?" asked CFO Faisal Shahzad.
"Let them borrow on merit. MyBank is not a piggy bank," Danish said sternly.
Scene 9: The Fallout
In 2008, Dewan Group was hit hard by the global financial crisis. MyBank's losses ballooned. The State Bank ordered an emergency audit. Rumors swirled that the government was encouraging merger discussions with other banks to stabilize the sector.
In 2010, MyBank was sold to Summit Bank. Dewan Yousuf quietly exited the financial sector.
In a final interview with Business Recorder, Yousuf stated:
"We tried to build something different. But in this system, innovation is punished and collusion is rewarded."
Question for Readers: Was the Dewan Group's banking venture doomed by over-ambition — or was it sabotaged by entrenched players fearful of change?
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