Treasury Department, SBP Oppose Decision: Senate Committee Approves Cos Banking (Amendment) Bill

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ISLAMABAD: A meeting of the Senate Standing Committee on Finance and Revenue unanimously approved the Banking Corporations (Amendment) Bill, 2021 despite opposition from the Ministry of Finance and the State Bank of Pakistan ( SBP) Friday.

The bill was passed unanimously by the committee meeting chaired by Senator Talha Mehmood, who was also the author of the bill. In the Bill, it was proposed that the Banking Companies Ordinance (BCO) 1962 be amended to impose a fine of one million rupees and a one-year term for refusing to provide banking services to consumers on the grounds of a politically exposed person (PEP).

“If an officer or banking company or bank schedules on the basis of creed, religion, gender, ethnicity, madrasahs or institute of Islamic education, class or group of citizens like politicians, civil servants or madrasa teachers refuses to open an account, issue a letter of credit or any other financial facility solely because of a politically exposed person, a red alert or high risk alert for trade without any sufficient restriction under any law shall be punished with imprisonment for one year and a fine of 100,000 rupees or both.” However, at the insistence of the members, the fine was increased to 1 million rupees.

The Ministry of Finance and the representative of the SBP objected to the bill, arguing that, in accordance with Article 74 of the Constitution, a bill or an amendment affecting the Constitution or the functions of the SBP cannot be introduced. or proposed only with the consent of the federal government.

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The SBP also said that as a regulator of the banking sector, circulars had been issued on five occasions with instructions to eliminate discrimination. Further, the meeting was informed that consumers have the right to approach the regulator against any discrimination from banks.

Looking at the issues related to Pakistani exporters to Afghanistan, the Committee discussed the issue in detail and explored the possibilities of resolving it. It was claimed that due to unrest in the region, banking channels were not available and hence recommendations were made to start barter trade or use the foreign currency system to resume trading activities . The committee ordered that i-form be suspended until conditions normalize.

The Ministry of Finance, in response to a question, regarding a certain amount of Khyber-Pakhtunkhwa National Finance Commission (NFC) allocation not yet released, said that out of the total of 533 billion rupees budgeted for the KP, 306 billion rupees from the divisible pool have been released until January 2022 in addition to the direct transfer of Rs14 billion.

The meeting was informed that in July 2021, 37.8 billion rupees from divisible pool and 0.728 billion rupees from direct transfer were paid to the KP, followed by 38 billion rupees from divisible pool and 1.431 billion rupees from direct transfer in August 2021, 49.083 billion rupees from divisible pool and direct transfer of 1.79 billion rupees in September 2021, 40.621 billion rupees from divisible pool and direct transfer of 4.6 billion rupees in October 2021, 43, Rs 9 billion from divisible pool and direct transfer of Rs 2.6 billion in November 2021 and Rs 53 0.8 billion from divisible pool and Rs2.4 billion in December 2021, while Rs44.4 billion from divisible pool and Rs0 . 479 billion direct transfers were paid to the KP in January 2022.

Copyright Business Recorder, 2022

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