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ABEDI AGHA HASAN (1922-1985)

ABEDI, AGHA HASAN (1922-1985) Agha Hasan Abedi was born in Lucknow, the capital city of the province the British called United Provinces, now called Uttar Pradesh (UP) His father was a tax collector for the estate of the Raja of Muhammadabad, one of the many Muslim princes who retained a measure of autonomy within British India The partition of British India in 1947 brought Abedi and his parents to Karachi along with millions of other Muslims who left India to come to PakistanIn Pakistan, Abedi joined the Habib Bank as a teller but left in 1959 to found another bank, the United Bank Limited (UBL), with startup capital provided by the Saigol family Under Abedi’s management, UBL grew quickly and established branches in all parts of Pakistan The members of the extended Saigol family also benefited from the close association with the bank, as they were able to draw on its assets to fund their rapidly expanding industrial empire It was the close association of industry and finance of this type that contributed to the nationalization of both by the administration of Zulfikar Ali Bhutto in January 1972 With UBL in government hands, Abedi was without a job He was not unemployed for very long, however; he established the Bank of Credit and Commerce International (BCCI) in September 1972 with capital injected by the ruler of Abu Dhabi Within a year of its creation, BCCI had opened offices in London, Luxembourg, Beirut, and the Gulf States, and by 1975 it had grown into a financial institution with assets of $2



2 billion and $113 million in capital BCCI continued to expand rapidly; it established operations in all parts of the world, including representative offices in the United States There was not a single developing country of any significance in which the bank did not have an active presence BCCI prospered in the financial “go-go” days of the late 1980s This period was marked by the availability of large amounts of liquidity produced by the sharp increase in the price of oil by the Organization of Petroleum Exporting Countries (OPEC) The United Arab Emirates, an OPEC member, was a major supplier of capital for the new bank BCCI adopted an aggressive posture aimed at increasing its market share in the industrial countries This caused it to adopt unconventional ways of attracting new customers and eventually contributed to its demise in 1991 Two of BCCI’s operations drew the attention of bank regulators in the industrial world: heavy losses sustained in commodity dealings in the late 1980s and the impression that its managers encouraged its officers to obtain deposits without regard to their origin That the bank had accepted deposits of money linked with drug trafficking in North and South America was confirmed when it pleaded guilty to moneylaundering charges filed against it in a court in Florida in the fall of 1988 In the meantime, the bank suffered another setback

Abedi became ill, suffered a series of heart attacks, and had to receive a heart transplant On 5 July 1991, a concerted operation organized by the Bank of England resulted in the closure of BCCI in all industrial countries and most developing ones At that time the bank’s assets were said to be approximately $20 billionBCCI’s closure left a number of bankers of Pakistani origin without jobs Many of them were eventually hired by private banks in the Middle East Some of these bankers found their way back into Pakistan in the 1990s when the government decided to privatize the banks that had been nationalized by Zulfikar Ali Bhutto

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