Senate panel warns of crypto misuse in hundi, hawala, kidnappings

ISLAMABAD: The Senate Standing Committee on Finance Wednesday warned that crypto was being misused for hawala, hundi, kidnappings and terror financing.

During the standing committee meeting — co-chaired by Senators Saleem Mandviwalla and Muhammad Abdul Qadir — Senator Mohsin Aziz pointed out that the abductors now demanded ransom in gold or crypto, not cash.

“The banned outfits in Sindh and KP are also using this channel for foreign funding,” he warned.

Executive Director State Bank of Pakistan (SBP) Dr. Inayat Hussain said the options under consideration were either banning or regulating cryptocurrencies, noting that “the younger generation has more capacity to deal with these assets.”

Senator Dilawar Khan asked what benefit such a law would bring to Pakistan’s economy, arguing that lowering tax rates would do more to raise revenue.

The committee continued its deliberations on the Virtual Assets Bill 2025, aimed at regulating digital currencies and clamping down on money laundering and terror financing.

The committee carried out a clause-by-clause review of the draft bill and indicated it was likely to approve the refined version in its next meeting.

Finance Secretary Imdad Ullah Bosal said the bill was designed to regulate virtual assets, improve transparency and curb illicit financial flows — not to boost tax collection or impact loans.

Mandviwalla concluded that regulation was urgently needed since crypto was already driving capital flight through informal channels.

The finance ministry officials said Pakistan already ranked among the top 10 countries in virtual asset investment, but absence of regulation had left the sector in a “grey area.”

The members also raised a red flag over the governor and deputy governor of the State Bank of Pakistan (SBP) for fixing their salaries and perks and privileges worth millions of rupees per month.

The governor draws a salary and perks of Rs4 million per month, and the federal government is not empowered to fix their salaries under the SBP Act 2022, enacted during the PTI-led regime under the IMF conditions.

The panel also summoned secretary finance and the SBP governor in its next meeting and to justify fixing their salaries and other perks and privileges at the higher levels.

Finance ministry officials distanced themselves when the senators raised questions about the salaries in the central bank, arguing that the secretary finance, being a member of the Board of Directors of the SBP, might have expressed his opinion, but the ministry had nothing to do with fixing the salaries.

Senator Anusha Rahman from PMLN raised the issue during the committee proceedings chaired by Senator Saleem Mandviwalla at the Parliament House.

Anusha also grilled the SECP and asked whether the secretary finance had objected to the raise in their salaries and perks.

Anusha said she would propose changes in the laws to introduce a uniform mechanism for fixing salaries and perks. They should have no discretion to fix their salaries, Anusha added.

Some members, including Senator Mohsin Aziz and Faisal Sabzwari, argued that it was the board’s prerogative to fix salaries under their respective laws, and the next meeting should be held in-camera to discuss the issue.

The panel was shocked to learn that the board of governors of the SBP was authorized to fix their salaries. The committee expressed shock that the SBP board had approved an increase in salary from Rs2.5 million to Rs4 million during the tenure of former governor Reza Baqir. The increase in October 2023, up from Rs2.5m, was drawn by Baqir in 2019.

The members demanded a legal amendment to ensure that even the country’s top banker cannot decide his own pay, with Senator Anusha Rahman insisting that not even the president or prime minister fix their own salaries. The lawmakers also flagged serious concerns over the Securities and Exchange Commission of Pakistan, whose officers gave themselves a collective raise of Rs380m without government approval. The members pushed for a uniform policy covering salaries and privileges across all 19 regulatory bodies.