Bank of Azad Jammu & Kashmir to Sign Rs. 1.7 Billion Project Amidst Allegations of Massive Irregularities

The Bank of Azad Jammu & Kashmir (BAJK) is set to finalize a Rs. 1.7 billion contract for a Core Banking System, despite widespread allegations of irregularities. Sources told ProPakistani that BAJK floated the Core Banking System tender in early 2022. After multiple extensions, only two companies participated in the bidding process: Iconsult and another unnamed firm. Insiders claimed that the project appeared to be earmarked for an Islamabad-based consultancy firm from the outset. It is alleged that senior members of BAJK’s Board of Directors (BOD) exerted influence to ensure that the Islamabad-based firm secured the contract, even if it meant bypassing essential criteria outlined in the Request for Proposal (RFP) and Public Procurement Regulatory Authority (PPRA) rules. A key point of contention was the project demonstration, which was a mandatory requirement for technical evaluation. Sources added that Iconsult initially failed the demo stage. However, under significant pressure from some members of the BOD, the company was granted an additional opportunity to present its demonstration. Although both sessions were officially recorded, insiders report that no officials dared to challenge the undue influence exerted by the Chair due to the high stakes involved. BAJK awarded the contract to Iconsult on December 17, 2024, stipulating that the company must submit a performance security guarantee within 15 days of receiving the notification of the award. However, Iconsult has reportedly failed to meet this critical requirement within the RFP-defined timeline, added the source. The other participating company, AutoSoft, was technically disqualified by BAJK despite being considered technically superior compared to Iconsult, sources added. Industry experts pointed out that in other banking institutions, such as Zarai Taraqiati Bank Limited (ZTBL), AutoSoft has demonstrated far better results. This discrepancy has fueled suspicions of favoritism, as BAJK has continued to show leniency towards Iconsult by not scrapping the tender even after the vendor failed to meet the stipulated 15-day deadline. The delay has caused significant setbacks for BAJK, delaying its long-anticipated Scheduled Bank license from the State Bank of Pakistan (SBP), thereby hampering the institution’s progress and credibility. It seems that BAJK is not entirely clear on the terms of the RFP, as the Letter of Award explicitly mentioned a 15-day deadline from its issuance, whereas the bank is now stating that the deadline applies 15 days after contract signing. This contradiction raises further concerns about procedural inconsistency, the sources added. The Acting President of BAJK responded to these allegations, stating that the matter was taken to the Supreme Court of Azad Jammu and Kashmir. After multiple hearings, thorough examination of evidence, and consideration of all legal aspects, the Court issued its judgment in favor of BAJK. This ruling validates that the procurement process adhered to the required regulations and procedures. In addition, he mentioned that two inquiry committees were also formed on this matter: one under the Chairmanship of the Secretary Finance, Government of AJK, and the other headed by the Secretary Law, Government of AJK. “The procurement process was conducted in accordance with relevant rules and regulations. BAJK ensured transparency, fairness, and compliance with established procedures. The evaluation of bidders, including Iconsult, which is a local partner of a Singapore-based internationally reputed company, followed the necessary technical and procedural requirements,” added the Acting President. “The Supreme Court reviewed all allegations regarding undue influence and, based on the evidence, ruled in favor of BAJK. This affirms that the bank acted lawfully and within its rights. As per the contract, the selected vendor was required to submit a performance security guarantee. After the finalization of the process, the performance security guarantee will be submitted. Any procedural developments regarding this were handled as per the contractual obligations and the legal framework governing the agreement. The Supreme Court’s decision clarified that the process adhered to legal standards, and BAJK continues to ensure compliance with procurement laws,” stated the President. The Acting President further stated that the procurement and evaluation processes were conducted as per predefined criteria. The technical assessment and selection were carried out professionally, with all bidders being evaluated based on their submissions. The Supreme Court’s verdict confirms the legitimacy of BAJK’s decision-making, ensuring that the process remained fair and in line with regulatory guidelines, he noted. The Acting President also stated that BAJK remains committed to securing Scheduled Bank status and is actively working with the relevant authorities, including the State Bank of Pakistan (SBP). The procurement process does not jeopardize BAJK’s progress, and the bank is taking all necessary steps to meet the requirements for Scheduled Bank status in a timely manner. “We appreciate your journalistic inquiry and assure you that BAJK remains fully committed to transparency, legal compliance, and institutional progress,” he added. ProPakistani has contacted Iconsult regarding this matter and will update the article with their response once it is received.