Pakistan's National Accountability Bureau, or NAB, sanctioned an investigation into the State Bank of Pakistan and BankIslami Pakistan Ltd. over the alleged misuse of authority with regard to the merger of BankIslami Pakistan and the now defunct KASB Bank Ltd.

The NAB said Oct. 4 it launched the investigation over the alleged misuse of authority in terms of the non-transparent merger of KASB Bank into BankIslami Pakistan and the grant of 20 billion Pakistani rupees for this purpose. The grant caused "a loss of billions of rupees to the national exchequer," the bureau said.

BankIslami Pakistan had denied it received financial assistance from the central bank in relation to the KASB Bank takeover. It said September that it received temporary funding support of 15 billion rupees from the State Bank of Pakistan, with its Islamic bonds as collateral, to pay off the depositors of KASB Bank.

As of Oct. 4, US$1 was equivalent to 105.39 Pakistani rupees.