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Thursday March 28, 2024

Financial irregularities worth billions of rupees detected in KP

By Arshad Aziz Malik
November 03, 2017

PESHAWAR: Large-scale financial irregularities and misappropriation of funds have been detected in the Khyber-Pakhtunkhwa province.

According to sources, all former provincial governments and the incumbent Pakistan Tehreek-e-Insaf government have failed to maintain any financial discipline in the financial affairs.

The government departments, while violating the financial laws at will, deposited Rs30 billion, out of Rs1.723 trillion, in private banks. These funds were neither spent on any development schemes in the province nor deposited in the national kitty again.

Finance Secretary Shakil Qadir has claimed detecting Rs40 billion in private banks, which are lying in these accounts for years and never used for any uplift purposes. Chief Secretary Azam Khan has taken notice of the affairs and ordered investigation into accounts of these private banks. Sources said disciplinary action is on the cards against the officials who had opened these accounts illegally.

Shakil Qadir admitted that no department could open any account with a private bank without prior permission from the finance department. He said details in this regard have been sought from all private banks. These accounts will be closed and the amount deposited in these accounts will be recovered and deposited in the national exchequer.

Sources said these departments have deposited funds in saving accounts, besides current accounts in private banks, without any permission from the authorities concerned. They said interest money is being received from these accounts, though it is yet to be probed where this money is spent.

According to the finance department documents, 34 provincial government departments have opened their accounts illegally in private banks. These departments include: finance department, health, textbook board, elementary and secondary education, Peshawar Development Authority, local government, environment, higher education, law, industry, Board of Intermediate and Secondary Education Peshawar, commissioner, deputy commissioner, Sarhad Development Authority, Small Industries Development Board (SIDB), Board of Revenue, Frontier Education Foundation, Information Department, Sports and Tourism, Technical and Vocational Education, Zakat and Social Welfare, Food Department, Social Security and Employees, Agriculture, Housing, Police, Auqaf, Hajj and Religious Affairs, Telecommunication and Development, Labour, Home and Tribal Affairs, Chief Minister’s Secretariat, Minerals, Project Director Development, and DG MPU.

According to Article 6 of Chapter 2 of the Finance Department’s Rules, the public funds could only be deposited in the State Bank of Pakistan, National Bank of Pakistan, and the Post Office Saving Bank. Without prior permission from the Finance Department, no official account could be opened in any private bank.

Also, permission is needed from the government for investment in any private banks. According to official documents, the Finance Department has detected Rs1,72,35,82,69,000 of all government departments in private banks. However, the Finance Department has no record of this money, out of which Rs30 billion has been detected in private banks, in sheer violation of the rules.

The documents show the banks’ current accounts have a total amount of Rs14,724,800,000 followed by call deposit accounts Rs195,600,000, saving accounts Rs53,480,000,000, time-fixed deposits Rs90,670,000,000 and other accounts Rs13,286,600,000.

According to bank-wise details, Khyber Bank (Khyber Pakhtunkhwa’s official bank) has 44 per cent amount Rs76,167,211,000 and 38 per cent amount Rs66,448,035,000 deposited in the National Bank.

The remaining money of different government organisations is deposited in the following private banks: Allied Bank Rs6,414,400,000, MCB Rs4,570,269,000, Bank Al Falah Rs2,640,755,000, Habib Metro Bank Rs2,094,877,000, Sindh Bank Rs1,994,918,000, Soneri Bank Rs1,820,914,000, Summit Bank Rs1,758,973,000, Habib Bank Rs1,718,921,000, JS Bank Rs1,670,652,000, Al Baraka Bank Rs1,311,047,000, Askari Bank Rs1,295,055,000, The Bank of Punjab Rs476,475,000, Faisal Bank Rs407,911,000, NIB Bank Rs230,876,000, SME Bank Rs222,769,000, Silk Bank Rs211,523,000, UBL Rs206,308,000, Samba Bank Rs175,123,000, Bank Al Habib Rs168,204,000, Meezan Bank Rs154,133,000, Zarai Taraqiati Bank Rs100,000,000, Bank Al Islami Rs634,063,000, MCB Islamic Bank Rs29,078,000, Dubai Islamic Bank Rs5,732,000, First Women Bank Rs4,374,000 and Industrial Development Bank Rs184,000.

When contacted, Finance Secretary Shakeel Qadir said an amount of around Rs40,000,000,000 deposited in private banks out of a total of Rs172,000,000,000 had not been used for the last few years. The government organisations violating the rules and regulations opened accounts in private banks and some opened current and some saving accounts, he added.

According to Shakeel, funds are disbursed to all government departments every year in budget, while the amount is deposited in state-run National Bank and Khyber Bank so that the unutilised money could return to the provincial finance department at the end of financial year. However, the money deposited in private bank accounts remains there.

Sharing details, the finance secretary said the money for water supply was in a bank since 1994, which had not been used. Similarly, an account of DC Mansehra was closed in 2004 but the money was still there, he added.

He admitted that the money was deposited in different banks for the last several years but there was no record; however, the process was being computerised.

He said around Rs100,000,000,000 out of Rs172,000,000,000 were pension, gratuity, hydro and other funds, on which profit was being earned. On the other hand, Shakeel added, an amount of around Rs40,000,000,000 represented the funds for universities, hospitals and Baitul Maal, which was not being lapsed.

But, he said, investigation was under way for Rs40,000,000,000 deposited in private banks so that it could be transferred to state-run banks and used by the provincial government.

Senior banker Arbab Riaz Ahmed told daily Jang that the banks issued statements at least twice a year; therefore, the departments, having banks accounts, received the letters/ statements regularly.

He said government officials could not open accounts in private banks without the approval of the authority concerned, adding that sharing the accounts’ details with the finance department was a responsibility of the relevant department.

Expressing his astonishment over the situation, he said inquiry could be held after withdrawing the money from banks, adding that there was no issue if the profit, in case of any, was still in the banks, but it would have to be traced out if the profit had been utilised.