The State Bank of Pakistan (SBP) has proposed mandatory verification of pensioners biannually or annually to eliminate reported ghost pensioners. Deputy Governor State Bank Saeed Ahmed responding to questions on Wednesday during Senate Standing Committee of Finance meeting chaired by Saleem Mandviwalla, said this is a global practice that survival certificate is produced to claim pension.
Saeed Ahmed further stated that biometric system can be used to ascertain or determine whether pensioner is dead or alive. He said 600,000 fake pensioners' figure mentioned by the National Bank of Pakistan (NBP) seems to be exaggerated. We need to solicit the viewpoint of major organisations disbursing pension including federal and provincial government departments. The Deputy Governor said that it is not very simple as if one pensioner draws Rs 5,000 monthly, the annual bill of the reported fake pensioners would amount to Rs 36 billion. Employees Old-Age Benefits Institution (EOBI) and major private sector organisations are big employers. He added that State Life can be asked as to what is their system for pension.
The acting secretary finance said the Accountant General Pakistan Revenue (AGPR) and the Controller General Accounts (CGA) as well as post offices are relevant stakeholders for pension. The chairman of the committee said there is need for in-depth study of the process and mechanism of pension as well as the viewpoint of all the stakeholders to ascertain facts.
The Deputy Governor also proposed that a special unit can be set up in the consumers' protection department of the SBP on the issue of politically exposed persons (PEPs) after chairman as well as members said that a large number of people have approached them complaining that banks have either refused to open their accounts or closed their account on ground of political exposed persons. The Deputy Governor SBP assured the committee that it would hold a meeting with banks to remind them about their clear instructions that banks can neither refuse to open account nor close them and all the PEPs was meant to monitor consumers accounts in case of unusual transaction.
He added that PEPs mean individuals who are entrusted with prominent public functions either domestically or by a foreign country, or in an international organisation, for example heads of state or of government, senior politicians, senior government officials, judicial or military officials, senior executives of state owned corporations/departments/autonomous bodies. This does not intend to cover middle ranking or more junior individuals in the foregoing categories. The SBP requires banks to implement appropriate internal policies, procedures and controls to determine if a customer or beneficial owner is a PEP, to obtain approval from the bank's senior management to establish or continue business relations where the customer or a beneficial owner is a PEP or subsequently becomes a PEP, to establish, by appropriate means, the sources of wealth or beneficial ownership of funds, as appropriate; including bank/DFIs on assessment to this effect and to conduct during the course of business relations, enhanced monitoring of business relations with the customer.
The purpose of above instructions is to ensure necessary safeguards as per international norms and by no means refusal of banking services to above category of customers to comply with the international requirement. The committee also decided not to take up the agenda items with respect to KASB Bank after it was informed that the matter was sub-judice and the mover have also been satisfied by the response of regulator to their questioners. A representative of SBP informed the committee that they have already submitted replies to questions asked by the committee members on the issue of KASB.