Banks offer only Rs500,000 legal cover to depositors

State Bank of Pakistan (SBP) Deputy Governor Inayat Hussain on Wednesday said that funds of depositors had legal protection worth Rs500,000 under the Deposits Protection Corporation (DPC).

This was disclosed during the Senate Standing Committee on Finance and Revenue meeting held with Senator Saleem Mandviwala in the chaired.

He said earlier its limit was Rs250,000 and the said amount limit fully covers 94 per cent of the depositors under the SBP subsidiary DPC.

The deputy governor said that all scheduled banks operating in the country were required to be members of the DPC to ensure the deposits in the banks come under the umbrella of the deposit protection mechanism.

Meanwhile, the customs authorities informed the committee that inspection teams had identified Rs69.5 billion money-laundering committed by 63 individuals during the last five years.

Member Customs, Zeba Hai Azhar, briefed the committee that almost seven accused attached with the solar equipment import-business were among those who smuggled billions of rupees to different countries.

The senate body took up various reports on the massive money- laundering by solar panel/equipment importers was also apprised that two accused had deposited Rs 26 billion in cash for import of solar panels.

The customs official said First Information Reports (FIRs) had been registered against six accused for their alleged involvement in the money laundering for causing dent to the national exchequers.

She highlighted that around 59 percent imports were done through green channels and most of the transition cleared in the Post Clear Audit a Federal Board of Revenue (FBR) department.

While briefing on the account opening issue faced by the Politically Exposed Persons (PEP), SBP officials informed that a focal person had appointed in each bank to facilitate the PEP in their account opening procedures.

The SBP also appointed a focal person in the SBP to solve the queries related to the account opening said adding that SBP further instructs banks to fast this procedure.

Senator Kamil Ali Agha said that the PEP faced problems in their account opening this is a violation of fundamental human rights and Article 10 of the Constitution.

He said action should be taken against such officers and persons who obstruct the opening of accounts.