March 20, 2024 (MLN): A positive development has emerged for the retired employees of the National Bank of Pakistan (PSX: NBP) as the Supreme Court has mandated the bank to pay pensions amounting to Rs60 billion.
As per the decision, NBP would disburse this sum within a month to 11,500 retired employees.
The legal case involved a review petition filed by the bank to challenge the initial decision regarding pension payments.
However, after a period of six years, the Supreme Court dismissed the National Bank's revision petition and upheld the decision to grant pensions to the employees.
A three-member bench headed by Justice Mansoor Ali Shah conducted the hearing and laid the aforementioned decision.
After incorporating the accounting impact of this pension liability, NBP is poised to keep its Capital Adequacy Ratio (CAR) well above the standard limit of 14%, as highlighted by the bank's management in their corporate briefing session.
NBP's CAR as of 2023 stands at 25.5%, and the aforementioned adjustment would just bring it down to 19% approximately, still sound on both a comparative and required basis, as per the management.
