Federal government, military, EOBI: 0.6 million ghost pensioners detected by bank, Senate body told

A public sector bank has told the Senate Standing Committee on Finance that it detected 0.6 million ghost pensioners of federal government, military as well as Employees Oldage Benefit Institutions (EOBI). Senior officials of National Bank of Pakistan (NBP) disclosed to the Senate Standing Committee on Finance presided over by Senator Saleem Mandviwala on Tuesday that the bank authorities came to know about 600,000 fake pensioners when their accounts were open to facilitate them. If such a big number can be detected by NBP alone what about the other organizations, the committee members and chairman observed.
The committee feared that this may prove to be the biggest scam in the country. An official of Accountant General Pakistan Revenue (AGPR) suggested that fake pensioners figure needs reconciliation as it was catering to total 375000 pensioners of federal government. However, the NBP official said they have got the number while opening the accounts of pensioners of EOBI, federal government and military. He added that the total number of pensioners with the banks has declined from 2.2 million to 1.6 million after exclusion of fake pensioners.
Saleem Mandviwala decided to hold another meeting on the issue and all the concerned would be invited to give a briefing to the committee in the light of a revelation about fake pensioners. The meeting was informed that earlier, pension to the pensioners was disbursed through treasuries, selected post offices and Railway's pension payment offices. Later on all the post offices and branches of National Bank of Pakistan were authorized to disburse the pension to civil as well as Armed Forces pensioners.
President NBP Syed Ahmed Iqbal Ashraf informed the committee that the NBP suffered Rs 18.5 billion losses in Bangladesh operation and the matter is being sent to the National Accountability Bureau (NAB). The meeting was also informed that NBP tried to send some officials for investigation and to ascertain the reasons of losses but they were not allowed by Bangladeshi government. The meeting was also informed that NBP is moving Bangladeshi courts against the people involved in the scam. NBP officials said that all 61 people identified including president were from Bangladesh. The meeting was further informed that bank advances on June 30, 2015 stood at Rs 316 billion. Non-Performing Loans (NPL) of the banks stood at Rs 120 billion against provision of Rs 105 billion, the official added.
Home Remittances: The meeting was informed that home remittances registered a robust growth in recent years and rose to US $18.5 billion during fiscal year 2014-2015 with a strong growth of 16.5% over the preceding year. The sustained robust growth in remittances has provided Pakistan much-need foreign exchange comfort, as the trade deficit continues to remain high. The remittances made up for nearly 45 percent of the country's import bill and exceeded the deficit in external trade, which was recorded at US $17 billion during FY15. Home remittance as percentage of GDP has also increased from 6 per cent in FY14 to 6.4 percent in FY15.
Pakistan Remittances Initiative (PRI) to facilitate remitters and recipients to increase the flow of home remittances through formal channels increased the outreach of financial institutions in the country through inclusion of more banks in the remittance business, increased outreach in overseas corridors through engaging more money transfer companies for Pakistani market and ensured effective implementation of technology in processing millions of remittance transactions as well as setting up a complaint resolution mechanism by banks, overseas tie-ups and PRI.
Saudi Arabia remained the top origin of inflow of home remittances in Pakistan. Pakistanis in Saudi Arabia sent US $5.6 billion during FY15 with a 19.1% growth in remittances over FY14. Consequently, the share of Saudi Arabia in total remittances has further improved to 30.5 per cent from 29.9 per cent in FY14. Similarly, the UAE witnessed a remarkably high growth of 35.3 per cent during FY15 that resulted in a sharp increase in its share from 19.6 per cent in FY14 to 22.8% in FY15. In contrast to Saudi Arabia and the UAE, the shares of US and UK witnessed a decline to 14 per cent and 12.4 per cent, respectively, due to sluggish growth in home remittances during FY15.
Prime Minister's Youth Business Loans (PMYBL) Scheme was launched by the Prime Minister in December 2013 through National Bank of Pakistan (NBP) and First Women Bank Limited (FWBL). The Scheme envisages extension of small business loans of up to Rs 20 lacs through the banking system at 8 per cent.
Difference of banks' rates and borrowers' rate is absorbed by the Federal Government. As per announcement of the Finance Minister in fiscal year 2015-16 budget speech, service charges for borrowers would be reduced from 8 per cent to 6 per cent from July 1, 2015. The meeting was informed that private banks were reluctant to participate in the PMYBL because of huge investment and cost. In order to expand coverage by private banks in this area, governor SBP held meetings with Presidents, Chief Executive Officers (CEOs) of private banks and urged them to effectively participate in PMYBL. As a result, seven more banks started financing under PMYBL during the first half of FY15, while seven more banks committed to launch PMYBL financing during second half of FY15. The meeting was informed that the response to the loan scheme was not very encouraging.