Bank of Khyber Dispute: Is private shareholder challenging government authority?

PESHAWAR: A governance dispute has emerged at the Bank of Khyber, raising serious questions about the implementation of law and the balance of control between the government and private stakeholders.

According to sources, the Government of Khyber Pakhtunkhwa holds more than 70% shares in the bank. However, despite being the majority shareholder, it has reportedly failed to enforce its own legislation.

A major private stakeholder, Ismail Industries Limited, is said to have resisted recent changes introduced through the Bank of Khyber Amendment Act (January 2025). The law aimed to reduce the number of private directors on the bank’s board.

In February 2025, the provincial government issued formal directives to implement the law, which were also communicated to private shareholders. However, in March 2025, the private stakeholder reportedly refused to comply, indicating it could challenge the move in court.

Sources further reveal that in August 2025, the law department declared the amendment constitutional. Despite this, implementation has remained incomplete. As of December 2025, the bank’s board of directors has not been fully reconstituted.

The incomplete board structure has delayed key decisions, including budget approvals and strategic initiatives. Disagreements over senior-level appointments and governance continue to persist.

Private stakeholders maintain that the current directors’ tenure extends until 2027, while the government argues that the new law allows for restructuring of the board.