ISLAMABAD: After slapping a meagre Rs90 million penalty against banks for their alleged involvement in Rs200-300 billion money laundering in the import of solar panels, the Senate panel has failed to evolve a consensus on referring this major scandal to the FIA for initiating criminal proceedings against the banks.
Instead, the Senate Standing Committee on Finance and Revenues seems to have agreed to an in-camera session next time after the deputy governor of the State Bank of Pakistan (SBP) suggested sharing more details without allowing the participation of media. The SBP high-ups were supposed to share the names of banks along with other relevant details, including actions taken against bank officials involved in this scam.
The Senate Standing Committee also took up the issue of fake notes of Rs5,000 denomination but the deputy governor SBP failed to provide details.
Objecting to the role of SBP, Senator Mussadik Malik accused the SBP of not deliberately giving information while the FBR had precisely shared the details with the names of banks and individuals in this Trade-Based Money Laundering (TBML) of Rs200-300 billion. The SBP, he added, merely imposed a penalty of Rs90 million.
“Is it a good idea to launder money and get a clean chit by paying a meagre penalty,” he asked. Senator Mohsin Aziz asked how the banks deposited Rs42 billion from a company for the last so many years. This kind of negligence cannot be committed without the connivance of banks, he added.
The committee members grilled the SBP high-ups but the Senate panel failed to muster the required numerical strength for referring it to the FIA despite hints dropped by the panel chairman Saleem Mandviwalla. Senator Saadia Abbasi argued that it would not be good for the business environment to name the banks in the involvement of TBML, so this issue should be closed down at this stage as FIRs were registered against those involved in the case.
Finally, the Senate panel seemed to agree that they would hold an in-camera session next time when the SBP would share more details. The executive director of SBP, on some occasions, wanted to share more details but the deputy governor restrained him from sharing further information.
The panel expressed dissatisfaction with the State Bank of Pakistan’s (SBP) response regarding the investigation into substantial money laundering by solar panel importers. During the deliberations, it was noted that the deputy governor failed to provide sufficient details on actions taken against the accused parties and banks involved in money laundering.
The committee learned that banks had filed 9,170 Cash Transaction Reports (CTSs) against importers flagged by the SBP, resulting in penalties totalling approximately 9 crore rupees for around 69 billion rupees of overpricing. Actions were taken against 17 bank officials. The committee argued that the imposed penalties did not align with the gravity of the crime and advocated for enhanced legislation with stricter penalties for offences impacting the country’s economy.
Additionally, the committee recommended further discussions on fortifying rules and regulations, requesting a comprehensive, tabulated report on the number of banks involved, the amount of money in laundering activities and the penalties imposed.
About the non-filing of returns by the FBR officers, Chairman FBR Amjad Zubair Taiwana said there were a total of 19,151 employees of the FBR of which 10,102 were return filers. He explained that there were 9,049 non-filers out of 8,503 who earned below Rs50,000 per month. As many as 325 officers are working on deputation and are not supposed to file the returns. There are only 209 officers whose income falls into the tax net but did not file their returns. Now there were reports that 186 had also filed their returns on Tuesday.
In a separate briefing on the reported strategic cooperation agreement between HBL and the Bank of China, the committee learned that a Memorandum of Understanding (MoU) for Strategic Cooperation had been signed. The committee commended this initiative, anticipating improved trade opportunities for Pakistan.
The State-Owned Enterprises (Governance and Operations) (Amendment) Bill, 2023, introduced by Senator Bahramand Khan Tangi, was deferred. The committee proposed presenting a comparative report between the previous bill and proposed amendments for a comprehensive evaluation. The bill aims to amend the act, ensuring the board’s detachment from the day-to-day functioning of the company. It was argued that directors using company assets for political purposes should be disqualified and the appointment of CEO should shift from the board to the controlling ministry after the board’s recommendation. The Senate panel endorsed the proposition but sought a comparison report for further deliberation.
