'SBP never allowed anyone to purchase property abroad'

RECORDER REPORT

ISLAMABAD: The State Bank of Pakistan (SBP) has acknowledged that money is being laundered through informal channels of Hundi and Hawala and denied that the regulator has ever allowed any individual to purchase property abroad.

Speaking during a meeting of the National Assembly Standing Committee on Finance, which met with Qaiser Ahmed Sheikh on Wednesday, SBP Governor Ashraf Mahmood Wathra said, “SBP has never allowed any individual in the history to purchase property abroad. We have neither the role nor the function of inspection.”

He further stated, “Everybody knows how people take money abroad and there are informal and formal channels with Hundi and Hawala as well as formal channel of Pakistan Economic Reform Act.”

A member of the committee, Asad Umar, said he has been seeking information about a staggering amount of $6.6 billion taken abroad to buy property in Dubai but was unable to get anything from the government institutions. He said, “It is almost impossible to capture a powerful person in this country.” He also said that even the delaying tactics by the committee chairman are not lesser than deliberate stonewalling to cover up lack of transparency.

The committee also came down hard on Finance Minister Ishaq Dar’s decision to allow export of surplus urea produced in the country through subsidised gas. The committee unanimously proposed to the government that subsidised locally produced gas being provided to fertilizer sector should be linked with the price of imported LNG and their differential should be provided to farmers as subsidy. The committee recommended that gas price should be charged on the export volume of fertilizer from exporters and same should be provided to farmers as subsidy.

Ministry of National Food, Security and Research said it was not in favour of allowing export of urea and admitted that prices of locally produced urea would have declined to benefit the agriculture farmers if export was not allowed.

The committee discussed in detail the high mark-up rates being charged on agriculture loan but was unable to get any assurance of its reduction from Zarai Taraqiati Bank Limited (ZTBL) and State Bank of Pakistan or Ministry of Finance.

The secretary finance said the agriculture sector has been focus of the government during the last three years and he is optimistic that some incentives would also be provided to the sector in the next fiscal year’s budget. He said that on the request of the government, mark-up was reduced by 2 percent from 2016 by commercial bank and one percent by ZTBL.

The committee directed Finance Ministry and ZTBL to review the mark-up policy for agriculture sector after members accused the government of trading on policies to destroy the small farmers in the country.

The governor SBP informed the committee that only 22 per cent lending to agriculture sector is being provided by the ZTBL and rest of 78 per cent is lying with commercial banks. “We have been able to reduce the dependence on ZTBL,” he added.

The inability of National Accountability Bureau (NAB) to provide information on the Bangladesh scam of National Bank of Pakistan annoyed the committee and the chairman observed, “We cannot linger on the Bangladesh scam of NBP.” A representative of NAB stated that a meeting of the NAB board would take place today (Thursday) on the issue.

The committee directed the NAB to provide details of the matter in the next meeting of the committee.

The Group Chief from NBP informed the committee that NBP has already been taken necessary action against the accused. However, the committee was of the opinion that matter is lying with NAB for taking further action in this regard.

While briefing the committee on trade with Iran in local currency, the governor SBP stated that the matter was discussed in the cabinet meeting and as soon as minutes of the meeting are received, Pakistan would settle the trade with Iran with any non-US currency.

He said the cabinet has decided to start trade relations with Iranian banks; however, the approval of the minutes of the said cabinet meeting is awaited for further necessary action. He stated that hopefully the matter will be resolved soon.