Pakistan to get another $1b from Saudi Arabia this month

Finance secretary says talks with China for financial assistance under way

ISLAMABAD: A parliamentary panel was informed on Wednesday that Pakistan would receive another tranche of $1 billion from Saudi Arabia in the current month.

Briefing the Senate Standing Committee on Finance, Additional Finance Secretary Mohammad Sohail said the United Arab Emirates (UAE) had committed to deposit $3 billion in the State Bank of Pakistan (SBP) in order to give a cushion to Pakistan’s balance of payments.

Responding to a question, the secretary told the committee, chaired by Farooq H Naek, that negotiations with China on financial assistance were under way. He said Pakistan had hoped for an encouraging response from China, adding that Saudi Arabia had already given $2 billion whereas another $1 billion was expected soon to support the balance of payments.

The committee decided to send the Banking Companies’ (Amendment) Bill 2018, moved by Senator Raza Rabbani, to the Senate for its passage with the consent of its members despite opposition from the central bank. The bill seeks the deletion of Section 27b from the Banking Companies Ordinance 1961, which limits union activities in the banking sector.

Rabbani argued that the section violated the spirit and rights conferred by Article 17 of the Constitution and was in violation of provisions of the International Labour Organisation (ILO) as Pakistan was a signatory.

He pointed out that the section was also contrary to provisions of the Industrial Relations Ordinance (IRO), which allowed for 25% of members of trade unions from outside the organisation. A report of the Justice Shafiur Rehman Commission has also recommended the deletion of the section.

Earlier, during discussions on the amendment bill and responding to a question from committee members, a senior SBP official contended that Section 27b of the Banking Companies Ordinance 1962 did not prohibit union activities and it was introduced in 1997 to protect the depositors’ interest against union activities.

He pointed out that union activities were carried out with the active support of outside elements, which led to the insertion of Section 27b.

“The unfortunate state of affairs prevailing in the banking industry prior to 1997 explain the significance of the section as politicised and disgruntled elements, mostly outsiders, were misusing union platforms for promoting their personal interests at the cost of depositors’ money,” he said.

These elements, he added, were misusing bank facilities like telephones, cars and other resources and a situation of complete anarchy and chaos had prevailed all over the banking industry.

The situation led to a growing feeling among bankers, regulatory authorities, the government and the general public that some suitable and reasonable legal means should be adopted to prevent the unlawful acts being carried out under the garb of trade union activity. He said the section was introduced to stop the misuse of bank resources for union activities, the carrying of weapons into banks, carrying out union activities during office hours, subjecting bank officials to physical harassment or abuse, and non-employees from being office-bearers of the unions.

The official said the SBP had also responded to the ILO through the Ministry of Finance and informed it that union activities were not restricted if the set parameters in the section were followed.

Senator Muhammad Ali Khan Saif also presented an agenda item to draw the attention of the committee towards the problems being faced by advocates and politicians in opening bank accounts. The committee asked the SBP to suggest proposals in the next meeting about how to streamline the procedure for opening the bank accounts.

The committee also discussed a private member bill titled ‘Maternity and Paternity Leave’ moved by Senator Quratulain Marri and directed the Law Division and the mover to prepare a comprehensive law, which would be presented in next meeting of the committee.

Published in The Express Tribune, January 3^rd, 2019.

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