MoF and SBP oppose move: Senate panel approves Banking Cos (Amend) Bill

ISLAMABAD: A meeting of the Senate Standing Committee on Finance and Revenue has unanimously approved Banking Companies (Amendment) Bill, 2021 despite, opposition of the Finance Ministry and the State Bank of Pakistan (SBP) Friday.

The bill was passed unanimously by the committee meeting presided over by Senator Talha Mehmood, who was also mover of the bill. In the bill it was proposed that Banking Companies Ordinance (BCO), 1962 should be amended to impose one million rupee fine and one year punishment for refusal to provide banking facilities to the consumers on the ground of politically-exposed person (PEP).

“If any officer or banking company or a schedule bank on the basis of creed, religion, gender, ethnicity, madrasas or Islamic education institute, class of group of citizen like politicians, government servants or teachers of the madrasas, refuses to open an account, issuance of letter of credit or any other financial facility only on the ground of politically exposed person, red alert, or high risk alert for business trade without any sufficient restriction under any law shall be punished with one year imprisonment and Rs100,000 fine or with both.” However, on the insistence of the members the fine was increased to Rs1 million.

The Finance Ministry and representative of the SBP opposed the bill arguing that as per Article 74 of the Constitution a bill or amendment affecting the Constitution or functions of the SBP can only be introduced or moved with the consent of the federal government.

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The SBP also stated that as regulator of the banking sector, circulars were issued five times with instruction to eliminate discrimination. Additionally, the meeting was informed that consumers have the rights to approach the regulator against any discrimination of the banks.

Discussing the issues related to Pakistani exporters to Afghanistan, the Committee reviewed the matter in detail and explored possibilities to resolve it. It was asserted that due to unrest in the region, banking channels were unavailable and hence recommendations were made to commence barter trade or use the Foreign Currency Cash system to resume trade activities. The Committee directed that i-form must be suspended until conditions normalise.

Finance Ministry in response to a question, regarding some amount of National Finance Commission (NFC) award out of the Khyber-Pakhtunkhwa has not yet released, stated that of the total budgeted Rs533 billion for KP, Rs306 billion from divisible pool have been released till January 2022 besides Rs14 billion straight transfer.

The meeting was informed that in July 2021 Rs37.8 billion from divisible pool and Rs0.728 billion straight transfer were released to the KP followed by Rs38 billion from divisible pool and Rs1.431 billion straight transfer in August 2021, Rs49.083 billion from divisible pool and Rs1.79 billion straight transfer in September 2021, Rs40.621 billion from divisible pool and Rs4.6 billion straight transfer in October 2021, Rs43.9 billion from divisible pool and Rs2.6 billion straight transfer in November 2021 and Rs53.8 billion from divisible pool and Rs2.4 billion in December 2021, while Rs44.4 billion from divisible pool and Rs0. 479 billion straight transfers were released to the KP in January 2022.

Copyright Business Recorder, 2022