Bank Of Credit And Commerce (bcci)

BANK OF CREDIT AND COMMERCE (BCCI)

PRESENTED BY: SHAHJAMAL HASHMI

BRIEF HISTORY • WELL-KNOWN ENTREPRENEUR OF PAKISTAN, KNOWN TO BE A MESMERISER IN TALK, FOUNDER OF UBL, AGHA HASSAN ABIDI TOOK A DIFFICULT STEP OF FORMING AN INTERNATIONAL BANK, AFTER BHUTTO NATIONALISED ALL FINANCIAL INSTITUTIONS IN 1972. • THIS HE DID WITH THE HELP OF INFLUENTIAL SHEIKHS OF GULF ESPECIALLY THE U.A.E RULERS. • SOON AFTER THE ESTABLISHMENT OF BCCI, ABIDI STOLE AWAY MAJOR BRAINS FROM UBL AND OTHER BANKS TO BCCI.

SUCCESS STORY • WITHIN A VERY SHORT PERIOD OF TIME, BCCI GAINED REPUTATION AS A LEADING BANK OF THE WORLD, LARGE ENOUGH TO GRANT LOANS TO THE THIRD WORLD COUNTRIES. THIS WAS BECAUSE OF THE RAPID GROWTH AND THE TRUST OF THE PEOPLE IT ENJOYED THROUGHOUT THE MUSLIM AND THIRD-WORLD. ABIDI FREQUENTLY TERMED BCCI AS A ‘FAMILY BANK’ , WHICH ACTUALLY SEEMED TO BE A FAMILY OF CUSTOMERS AND EMPLOYEES BOTH, BUT THIS EVENTUALLY TURNED OUT TO BE THE CAUSE OF BCCI’S MISERABLE DEMISE.

• THIS WAS AN ALARMING SITUATION FOR THE WEST, ESPECIALLY THE IMF FOR THE FACT THAT THE INTEREST WHICH IT GRABBED FROM THEIR ALREADY OVERBURDENED CUSTOMERS WAS THWARTED AWAY. MOREOVER LOAN WAS GRANTED AT MUCH LOWER INTEREST RATES BY BCCI, THAN IMF USED TO CHARGE, HURTING ITS MONOPOLY TO A GREAT EXTENT. ACCORDING TO IMF’S POLICY, ‘IMMEDIATE ACTION’ SHOULD HAVE BEEN TAKEN STRAIGHTAWAY.

SOURCES AND RESOURCES • WHILE BCCI WAS GAINING POPULARITY WORLD OVER, VARIOUS INVESTORS WERE FILLING THE POCKETS OF BCCI AND THEMSELVES AS WELL, HOWEVER THE MAJOR CONTRIBUTORS WERE STILL THE ARAB SHEIKHS. APART FROM THE MONETARY CONCERNS, BCCI HAD A GREAT DEAL OF INFLUENCE AS IT HAD BUILT FIRM RELATIONS WITH WELLKNOWN POLITICAL LEADERS OF THE WORLD. MOREOVER IT HAD THE ‘TRUST’ OF THE ‘PEOPLE’.

POLITICAL PATH • MAJOR SUPPORTERS LATELY FOR BCCI, MORE APPROPRIATELY AGHA HASSAN ABIDI, WERE THE GOVT. OF PAKISTAN, U.A.E ROYAL FAMILY, GENERAL NORIEGA OF PANAMA, SHAH OF IRAN, GOVT. OF LUXEMBOURG (PLACE OF INCORP), FORMER PRESIDENT OF THE UNITED STATES JIMMY CARTER (WHO WAS INFACT AN EMPLOYEE OF BCCI), AND MANY OTHER RENOWNED POLITICAL PLAYERS. OMAN, QATAR, KUWAIT AND OTHER GULF STATES FULLY SUPPORTED ABIDI, BLINDLY, FOR ALL HIS ACTIONS.

NON-RESTRICTIVE POLICIES • ON THE INSTRUCTIONS OF ABIDI, NAQVI AND OTHERS, POLICY OF FREE ACCOUNT OPENING WAS ADOPTED, AS FAR AS MONEY WAS BEING POURED INTO THE BANK. NO RESTRICTIVE PROCEDURE WAS INVOLVED, AND SECURITY REQUIREMENTS WERE NEGLIGIBLE. THIS WAS HIGHLY DESPISED BY THE WESTERN WORLD, WHICH WAS ALREADY KEEPING AN EYE ON THE WAY BCCI OPERATED.

ADVENT OF TERRORISM • THIS QUITE EASY POLICY OF BCCI ATTRACTED THE TERRORISTS AROUND THE WORLD, WHO FOUND A MOTHERLY LOVE IN THIS CRUEL WORLD OF SAFETY. BCCI TURNED TO BE THE SANCTUARY FOR TERRORISTS, AS IT PROVIDED NECESSARY CAMOUFLAUGE OF THEIR ‘BLACK MONEY’, AND IN ADDITION PROVIDED THEM ‘LUXURIES OF ALL SORTS’. THE MOST FAMOUS OF THESE TERRORISTS WAS “ABU-NIDAL”, WHO WAS ON THE TOPMOST WANTED LIST OF INTERPOL.

MONEY TRANSFER OR MONEY LAUNDERING? • THE MOST CONVENIENT OF FACILITIES PROVIDED BY BCCI TO ITS TERRORIST MASTERS WAS THAT OF EASY MONEY TRANSFER, WHICH TODAY IS KNOWN AS ‘MONEY LAUNDERING’ ONLY IF USED BY TERRORISTS. IF ABU-NIDAL DEPOSITED 10 M $ IN TEHRAN, HE COULD DRAW THE SAME AMOUNT IN AMERICA WITHOUT ANY RESTRICTIONS. THIS WAS HIGHLY COMMENDABLE FOR TERRORISTS GROUPS WHICH WERE ACTIVE AROUND THE WORLD.

THE INSIDERS, THE RATS • LOOKING AT THE PHENOMENAL GROWTH OF BCCI, THE CONCERNED AUTHORITIES WANTED TO KNOW THE INSIDE STORY BEHIND THE CURTAINS. THE MOST WORRIED PARTY WAS OBVIOUSLY THE FBI, WHICH USUALLY IS. SO, FBI BOUGHT SOME OF THE EMPLOYEES OF THE BANK IN ORDER TO ACCESS THE CONFIDENTIAL HAPPENINGS IN THE BANK, AND WHEREABOUTS OF ABIDI AND HIS TOP MANAGEMENT. THIS ‘FAMILY’ OF ABIDI WAS NOW TURNING INTO REBELLIOUS CHILDREN, WHO THOUGHT THEIR OWN INTERESTS TO BE SUPERIOR TO ALL OTHERS.

• MOREOVER, SOME OF THE UNDERCOVER OFFICIALS OF FBI WERE INVOLVED IN ORDER TO GATHER THE SECRET OF BCCI’S SUCCESS. THESE INSIDERS SOMETIMES APPEARED IN THE FORM OF CUSTOMERS, AS TRUSTEES AND SOMETIMES EVEN PERFORMED THE ROLES OF ‘SPECIAL FRIENDS’ TO HIGHER OFFICIALS, AND OCCASIONALLY AS ‘ENTERTAINERS’.

THE DOWNFALL • Technically the downfall of BCCI started with the extremely lenient lending policies of the bank. When this all came into the general information, the Governments got involved. First one, as usually is, was American govt. On the recommendation of the FBI, and other undercover agencies, strict legal check was imposed on the bank by the govt.

LACK OF FORESIGHT • The major blunder from Abidi,s side was that of ‘Blind Trust’ on his subordinates, and ‘Lack of Foresight’ about the excessive checks on BCCI and what results these could lead to. Results of such a mistake were as usually are, Abidi was betrayed by his own people, and govts’ were against him. He was left alone to fight the tempest of opposition and enmity all by himself, along with some of the loyal sprinters.