Placing names on ECL: SHC displeased with SBP’s ‘shortcut tactic’
Central bank does this to force people to meet demands.
KARACHI:
The Sindh High Court has warned the State Bank of Pakistan (SBP) against recommending names for the Exit Control List (ECL) “at the behest of financial institutions which adopt [shortcuts to] forc[e] customers to surrender to demands”.
The unusual warning came from a bench headed by Chief Justice Musheer Alam and Justice Imam Bux Baloch of the Sindh High Court here on Thursday during the hearing of a constitutional petition filed by Hassan Raza, a resident of London, UK, and a former director of a company called Northen Chemicals (Pvt) Limited. He has challenged the decision to place his name on the ECL. According to Raza, the company took a loan from Pak Libya Company but defaulted due to bad economic conditions. In a compromise, the company then undertook to pay Rs106.271 million and the petitioner’s liability was fixed at Rs9.5 million.
When the petition came up for hearing, the bench took notice of the bank’s recommendation as disclosed by its assistant director Mudassir Latif.
The bench noted that a number of similar cases had surfaced in which the SBP had recommended placing someone’s name on the ECL which causes a “tremendous inconvenience” to them. In many cases, the SBP may be justified, but in a larger number of cases, their request seems to be only motivated at the behest of a financial institution which is taking a shortcut to “force a customer to surrender to their demands which are either sub judice before a court or otherwise”, the bench said in its order. It asked the officer in court to convey its “displeasure” to the relevant officer.
The bench ordered Latif to appear with a positive stance and policy directive if there are any, at the next hearing and said that if he fails to, he will be in contempt.
Published in The Express Tribune, September 24th, 2011.
The Sindh High Court has warned the State Bank of Pakistan (SBP) against recommending names for the Exit Control List (ECL) “at the behest of financial institutions which adopt [shortcuts to] forc[e] customers to surrender to demands”.
The unusual warning came from a bench headed by Chief Justice Musheer Alam and Justice Imam Bux Baloch of the Sindh High Court here on Thursday during the hearing of a constitutional petition filed by Hassan Raza, a resident of London, UK, and a former director of a company called Northen Chemicals (Pvt) Limited. He has challenged the decision to place his name on the ECL. According to Raza, the company took a loan from Pak Libya Company but defaulted due to bad economic conditions. In a compromise, the company then undertook to pay Rs106.271 million and the petitioner’s liability was fixed at Rs9.5 million.
When the petition came up for hearing, the bench took notice of the bank’s recommendation as disclosed by its assistant director Mudassir Latif.
The bench noted that a number of similar cases had surfaced in which the SBP had recommended placing someone’s name on the ECL which causes a “tremendous inconvenience” to them. In many cases, the SBP may be justified, but in a larger number of cases, their request seems to be only motivated at the behest of a financial institution which is taking a shortcut to “force a customer to surrender to their demands which are either sub judice before a court or otherwise”, the bench said in its order. It asked the officer in court to convey its “displeasure” to the relevant officer.
The bench ordered Latif to appear with a positive stance and policy directive if there are any, at the next hearing and said that if he fails to, he will be in contempt.
Published in The Express Tribune, September 24th, 2011.