PAC orders forensic audit of $3b loans given in 2020

SBP chief proposes in-camera briefing instead of publishing names of borrowers

ISLAMABAD:

The Public Accounts Committee (PAC) on Wednesday ordered forensic audit of the distribution of $3 billion loans to 620 borrowers during the previous Pakistan Tehreek-e-Insaf (PTI) government.

A PAC meeting, with its chairman Noor Alam Khan in the chair, considered the issue of advancing loans worth $3 billion.

During the meeting, the finance secretary informed the committee that the loans were given under a refinance scheme.

Noor asked the finance secretary about the benefits to the national economy from these loans given at 5% interest rate. He asked that if the scheme was that “good”, then “why the size of our begging bowl got bigger”.

The finance secretary replied that it was a refinance scheme, adding that it was the mandate of the State Bank of Pakistan (SBP), implemented by the SBP through the commercial banks.

Read more: PAC orders probe into $3b interest-free loans

The SBP governor told the committee that the scheme was launched for one year in March 2020 after the emergence of coronavirus pandemic. He added that no foreign currency was involved in the scheme. The 5% rate was also revised, he added.

The PAC chairman questioned for whom this scheme was launched?

The SBP governor replied it was meant for industry where more than 85% of the lending came from the private banks.

He added that 42% of the borrowers were from the textile sector.

Read: PAC orders probe into PTI-era $3b lending

Noor said that under which law the SBP took this decision, asking whether the central bank had to publish the list.

He recalled that he wrote to the SBP on April 19 about the 620 people, who got $3 billion loans.

An officer of the defence ministry should also be involved in the inquiry, Noor said.

Committee member Barjees Tahir said that those 620 people must be named. However, the SBP governor suggested an in-camera briefing instead of publishing the names.