KARACHI: Dr. Shahid Hasan Siddiqi, an eminent economist and Chairman Research Institute of Islamic Banking and Finance, Karachi, has filed a constitutional petition in Supreme Court of Pakistan against State Bank of Pakistan and Ministry of Finance (MoF) under Article 184(3) of Constitution of Pakistan. It has been filed by Hashmat Habib.

In this petition, it has been contended that SBP has “illegally” linked rates of return on PLS deposits secured on profit and loss sharing (PLS) basis with the discount rate of SBP which has no relevance with the profitability of the banks. “This is gross violation of Section 40-A of Banking Companies Ordinance 1962. This is also a violation of Article 3 of the 1973 Constitution as negative real rate of returns are now being paid to about 21 million saving bank account holders,” according to petition.

It has also been stated in the petition that the Ministry of Finance has also “failed” to discharge its responsibility entrusted under Section 26-A(4) of Banking Companies Ordinance 1962. It has further been alleged in the petition that millions of deposits account have received about Rs.2000 billion less from conventional commercial banks due to “illegal” directives of SBP out of which about Rs.500 billion has been received less since March 2020. The Apex Court has been urged to declare null and void the “illegal and wrong orders” given to conventional commercial so that the interests of millions of PLS depositors are safe-guarded.—PR

Copyright Business Recorder, 2021