No one allowed to buy property abroad: SBP governor

Tells NA panel informal channels used to take money out of Pakistan

ISLAMABAD: Governor State Bank of Pakistan (SBP) Ashraf M Wathra on Wednesday informed the National Assembly (NA) Standing Committee on Finance that the central bank had never granted permission to anyone for purchasing properties at Dubai and people might have siphoned off billions of dollars through informal channels of Hundi/ Hawala or Pakistan Economic Reform Act. 

While quoting Dubai’s land authorities report, PTI leader Asad Umar said that Pakistanis had invested $6.6 billion for purchasing properties at Dubai and sought replies of seven questions from all relevant departments including FBR, SBP, FIA and others to ascertain as to the steps taken by these departments for taking money outside the country through illegal channels, for failure to declare their assets inside Pakistan and for purchasing property through tax-evaded money. 

The NA committee held its meeting under the chairmanship of Qaiser Sheikh here at old PIPS (Pakistan Institute for Parliamentary Services) building on Wednesday in which the Governor SBP replied that they had never granted permission to anyone for purchasing properties out of country. He said that it was not the role of SBP to perform as investigating agency as the SBP Act clearly defined its role. He said that informal channels were used to take money out of Pakistan which is commonly known as Hundi/ Hawala or Pakistan Economic Reform Act.  

Asad Umar made all out efforts for writing letter to FIA for obtaining information regarding steps taken by law enforcing agencies against those who evaded taxes and purchased property outside Pakistan.

However, the Chairman of the NA Panel said that first he would seek legal advice then letter would be sent to FIA to get the desired information. 

Finance ministry high-ups told the meeting that they had also written letter to the FBR for getting the desired information but so far got no reply from them. Asad Umar said that he had sought information on seven questions on December 1, 2016 but so far he is unable to get answer from any of the concerned departments.

Markup on Agri Loans: The NA panel unanimously recommended to the government to provide amount to small farmers in shape of subsidy. This amount should be equal to the benefit fertilizer companies enjoy on LNG supply. This proposal was floated by the MNA Asad Umar who argued that fertiliser tycoons were getting subsidy for export of surplus urea but the farmers were not getting the required benefits.

Earlier, the committee members took up the issue of mark up charged from small farmers to the tune of 13.5 percent on average against rate of 5 to 6 percent charged from industrialists. 

Governor SBP told the committee that the agriculture loan got doubled as disbursement stood at Rs336 billion three years ago which had now gone up to Rs700 billion. The spread between lending and deposit rates, he said, also decreased as it had now gone down to 3.5 percent against earlier spread of 5.45 percent. He said the cost of small loans for farmers was much higher than usual loans.

The SBP high-ups stated before the committee that the ZTBL (Zarai-Tarqiati Bank Limited) was main cause for higher interest rates for agriculture as it weighed average on disbursed loans stood at 14 percent. However, the ZTBL high-ups told the committee that their operation was quite similar to microfinance as they had opened 112 new branches and there was ratio of 70:30 for operation and supporting staffs.

Secretary Finance Tariq Bajwa said that National Bank of Pakistan and ZTBL had reduced their markups by 2 and 1 percent respectively. He said that the restructuring plan for ZTBL was underway helping to further reduce the rate of markup for agriculture sector which is currently facing unjustified rates in the range of 13.5 percent. In some cases, the commercial banks were even charging mark up in the range of 18 percent.

NBP’s Bangladesh Scam: The NAB’s Director Qadeer Dar told the meeting that the NAB’s Board would be holding its meeting on Thursday (today) for getting approval to file reference with Accountability Court against 17 accused persons who had plundered national exchequer at NBP’s branch at Bangladesh.

One accused Zubair Ahmed, former NBP employee, appeared before the committee and took stance that segregation of departments at internal level and concealment of information by branch manager at Bangladesh paved the way for this scam and he had nothing to do with it.  

Trade with Iran: Governor SBP told the committee that the federal cabinet approved draft of bilateral agreement with Iran’s Central Bank after which each country would settle claims in their own currencies while remaining settlements would be done either in Euro or Yen. But the official minutes of the Cabinet meeting are still awaited after which the formal agreement with Iran will be signed to establish banking channels aimed at promoting bilateral trade in the aftermath of abolishing UN sanctions against Tehran.