MUZAFFARABAD: The Bank of Azad Jammu and Kashmir (BAJK) is set to finalise the Rs. 1.7 billion contracts for the core banking system despite allegations of widespread irregularities.
According to media reports, the BAJK floated the tender for the core banking system in early 2022. After several extensions, only two companies participated in the bidding process: Iconsult and another unidentified firm.
Insiders claimed that the project appeared to have been earmarked for an Islamabad-based consultancy firm from the outset.
It has been alleged that senior members of the BAJK board of directors (BOD) used influence to ensure that the Islamabad-based firm won the contract, even if it meant bypassing the necessary criteria set out in the Request for Proposal (RFP) and Public Procurement Regulatory Authority (PPRA) rules.
A key point of contention was the demonstration of the project, which was a mandatory requirement for technical evaluation.
The sources added that Iconsult initially failed in the demo phase. However, under significant pressure from some BOD members, the company was given an additional opportunity to present its demonstration.
Although both sessions were officially recorded, insiders reported that no official dared to challenge the undue influence of the chair due to the high stakes involved.
The BAJK awarded the contract to Iconsult on December 17, 2024, on the condition that the company submit a performance security bond within 15 days of receiving the award notification.
However, Iconsult has allegedly failed to meet this crucial requirement within the stipulated timeline of the RFP, the source added.
The sources added that the other participating company, AutoSoft, was disqualified by the BAJK despite being considered technically superior to Iconsult.
Industry experts pointed out that in other banking institutions, such as the Agriculture Development Bank Limited (ZTBL), Autosoft has shown much better results. This discrepancy has fueled suspicions of bias, as BAJK has shown leniency towards Iconsult by not terminating the tender even after it failed to meet the 15-day deadline.
The delay has dealt significant blows to BAJK, delaying its long-awaited scheduled bank license from the State Bank of Pakistan (SBP), thereby damaging the institution’s growth and reputation.
It seems that BAJK is not entirely clear on the terms of the RFP, as the letter of award clearly mentions a deadline of 15 days from its issuance, while the bank is now saying that the deadline applies 15 days after the signing of the contract. The sources added that this discrepancy raises further concerns about procedural inconsistencies.
Responding to these allegations, the acting president of BAJK said that the matter has been taken to the Supreme Court of Azad Jammu and Kashmir. After several hearings, thorough examination of evidence, and consideration of all legal aspects, the court issued its verdict in favor of BAJK. This order confirms that the procurement process followed the required rules and procedures.
In addition, he informed that two inquiry committees have also been formed on the matter: one headed by the Secretary Finance, Government of Azad Jammu and Kashmir and the other by the Secretary Law, Government of Azad Jammu and Kashmir.
“The procurement process was carried out in accordance with the relevant rules and regulations. BAJK ensured transparency, fairness and compliance with the established procedures. The evaluation of the bidders, including Iconsult, a local partner of an internationally renowned company based in Singapore, followed the necessary technical and procedural requirements,” the acting president added.
The Supreme Court reviewed all allegations of undue influence and ruled in favor of BAJK based on the evidence. This confirms that the bank acted legally and within its rights. According to the contract, the selected vendor was required to submit a performance security bond. After the process was finalized, the performance security bond would be submitted. Any procedural developments related to this were handled in accordance with the contractual obligations and the legal framework governing the contract. The Supreme Court’s decision made it clear that the process is based on legal standards, and BAJK continues to ensure compliance with procurement laws,” the President said.
The Acting President added that the procurement and evaluation processes were carried out in accordance with pre-determined criteria. The technical evaluation and selection were done professionally, with all bidders evaluated on the basis of their submissions.
He noted that the Supreme Court’s decision confirms the legality of BAJK’s decision-making, ensuring that the process remains fair and in line with regulatory guidelines.
The Acting President also said that BAJK is committed to achieving the status of a Scheduled Bank and is actively working with relevant authorities, including the State Bank of Pakistan (SBP).
