The recent intervention by the Peshawar High Court to stay disciplinary proceedings against two senior officers of the Bank of Khyber (BoK) has stirred a wider debate far beyond the legal merits of the case. It has spotlighted deep-rooted issues within public sector financial institutions in Pakistan, raising concerns about internal governance, entrenched power structures, and the systemic challenges that prevent meaningful reform.
The case stems from the controversial financing of the Eclipse Resort Living and Mall project, which ended in default. The bank’s internal inquiry was launched to investigate alleged lapses by senior personnel involved. However, the officers in question moved the court, arguing that the matter had already been addressed by the National Accountability Bureau (NAB). While NAB may have dropped the case due to jurisdictional constraints or deferral to internal mechanisms, legal experts caution that such closures do not equate to a clean slate. Banks have the autonomous right to proceed with disciplinary action under their internal rules.
What is getting lost in the noise around this legal challenge is a broader institutional history. The Bank of Khyber has long been plagued by instability at the top, with frequent resignations of managing directors often accompanied by internal rifts and bureaucratic clashes. Several sources, both inside and outside the bank, describe how a select group of long-serving officers has maintained significant influence over the bank’s operations by aligning themselves with shifting factions on the board.
These individuals, often seen playing intermediaries between public and private sector directors, have been accused of fueling internal discord to protect their positions. In doing so, they have created a toxic work environment where trust is eroded and decision-making is mired in politics rather than professionalism. The protection they receive from select board members only emboldens them further, turning accountability into an abstract concept rather than a practical process.
This entrenched power dynamic has far-reaching implications. It undermines not just morale within the bank but also the broader mission of institutional reform. The current attempt to halt disciplinary proceedings before they conclude appears symptomatic of a deeper fear—not of being wrongfully punished, but of losing the impunity that has allowed certain individuals to operate unchecked for years.
Analysts argue that this case must be viewed as more than a dispute over a defaulted loan or flawed disciplinary process. It reflects a test of whether a public sector bank, sustained by taxpayer money, can enforce its own rules without being derailed by internal mafias and external interference. If the bank fails to see the process through, it risks sending a dangerous message—that certain individuals are beyond reproach, and that influence can override institutional integrity.
This is not just a question of justice for two employees, but a referendum on the strength and independence of governance structures in Pakistan’s public financial institutions. Whether this moment leads to real accountability or yet another cycle of obfuscation and protectionism remains to be seen.
The implications for the Bank of Khyber are clear: its credibility and future direction depend on how it handles this challenge. Will it uphold its internal processes, or will it once again fall victim to the very forces it needs to overcome? The answer will determine whether this saga is a turning point—or just another chapter in the slow erosion of institutional trust.