Public Accounts Committee (PAC) has directed Ministry of Finance to submit a complete list of Housing Building Finance Company Limited (HBFCL) loan defaulters. PAC meeting presided over by opposition leader Syed Khurshid Shah reviewed audit accounts of Finance Ministry and directed that PAC be provided data of loan defaulters in the next meeting.
The PAC also directed the Finance Ministry to ensure that HBFCL loans distribution be based on population and their interest rate lower than the commercial rate. The committee directed that house building loans must be given first to those who are eligible for the Benazir Income Support Programme (BISP). The PAC remarked that Rs 1.7 billion housing finance facility was inadequate and the allocation must be increased to ensure maximum coverage.
Secretary Finance Dr Waqar Masood said that a Mortgage Finance Company has been established to provide more loans to those constructing housing and that interest rate of HBFCL, which has been reduced from 17 percent to 10 percent, would be further reduced in case of a further slash in discount rate.
Dr Masood said the government has recently undertaken balance sheet restructuring on the advice of HBFCL management; and the new board is being restructured. He further revealed that restructuring of Zarai Taraqati Bank Limited balance sheet has been undertaken. The Secretary Finance said that the condition of minimum capital requirement would be taken care of after HBFCL''s SBP debt is converted into an equity. He further stated that a decision to this effect has been taken and completion of the required paper work is in process.
The meeting also directed the Auditor General of Pakistan to conduct a special audit of COMSATS. Shah stated that COMSATS has entered into an affiliation with a British university without any approval. He further stated a British university is charging two thousand pounds from the university against the degree. Chairman PAC said that the matter needs a detailed audit as it can become bigger scandal than Axact''s.
The audit official pointed out that an incentive scheme was introduced and recovery targets were set. The audit further stated that under this incentive scheme Rs 1.227 billion were recovered against the target of Rs 1.159 billion. The Chairman PAC said that there was no justification for providing an incentive payment when there was a shortfall of 16 per cent in recoveries.
Managing Director HBFCL informed the committee that against the approved budget of Rs 91 million, only Rs 6 million was paid as incentive. He added that as per latest figures total stuck up loans of HBFC are Rs 4.2 billion against 34,000 classified accounts holders. MD HBFCL said that unpaid loans have been reduced from Rs 6 billion to 4.2 billion and non-performing loans'' portfolio has been reduced from 50 per cent to 32 per cent.
PAC had expressed displeasure over the absence of Governor State Bank of Pakistan and Managing Director Pakistan Security Printing Corporation of Pakistan (Pvt) Limited and directed them to ensure their presence in the next meeting. Deputy Governors State Bank Pakistan (SBP) Saeed Ahmed and Riaz Riazuddin Ahmed, and Secretary Finance Dr Waqar Masood attended the PAC meeting.
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