ISLAMABAD: At least 600,000 `ghost pensioners’ drew money from the public exchequer for a long time from the National Bank of Pakistan (NBP) till the bank discovered the scam during efforts to reform the disbursement system in view of pensioners’ complaints about payment delays and heavy load of work on the bank staff.

This was stated by the President and Chief Executive Officer of the bank, Syed Ahmed Iqbal Ashraf, while testifying before the Senate Standing Committee on Finance and Revenue on Tuesday.

He said the number of people receiving pensions from his bank had dropped from 2.2 million to 1.6 million recently after an internal reform eliminated 600,000 `ghost pensioners’.

“This is breaking news…a big scam,” said an appalled Senator Salim H. Mandviwala, who presided over the meeting of the committee. Senator Mohsin Leghari wanted to know the amount of pensions so far paid to `ghost pensioners’.

Mr Ashraf said that the matter came to light when the bank started working on pensioners’ complaints who were facing problems because some branches were dealing up to 80,000 pensioners in the first few days of each month.

“Bank branches were flooded and the normal banking business used to suffer,” he said.

Mr Mudassir H. Khan, the Group Chief of Commercial & Retail Banking Division of the NBP, said that while addressing public complaints, the bank decided to convert pension flows into personal accounts and started issuing auto-teller machine (ATM) cards to pensioners which required national identity cards. It was at that stage, he said, when it came to light that 600,000 people drawing pensions from the NBP did not exist.

He said there was still a possibility of finding more such people as computerisation of the entire pension system was still continuing. He said that several pensioners died over the period, but the deaths were not reported to the government and they appeared on the payroll. The biometric verification and the ATM, he added, would help address this problem. The bank, he said, had, therefore, decided to use biometric verification of pensioners along with the ATM processing and the matter had been reported to the government.

He said the prime minister had constituted a committee for major reforms and the committee was still in the process of working out details. He said the Ministry of Finance and the State Bank of Pakistan had tried to transfer some work relating to pensions to private banks, but this did not materialise because private banks were more interested in collections than disbursements of pensions.

Senator Ilyas Bilour wondered how many ghost pensioners might still be drawing money through other sources like the Pakistan Post across the country and the number might be in millions, if provincial accounts were also examined. This should be checked, he said.

The Controller General of Accounts (CGA) said the number of ghost pensioners needed to be reconciled because the number of total federal government pensioners, according to the Auditor General of Pakistan revenue record, was around 375,000 which meant that the number of 600,000 was based on some `misunderstanding’.

Mr Mudassir Khan of the NBP, however, reconfirmed after consultations with the NBP team that the number reported was correct and belonged to three institutions – federal government, military and the EOBI.

When the members wanted to know the amount paid to ghost pensioners so far, the NBP management said it could be verified only by the AGPR or military accounts because the NBP was not making payments out of its deposits but on the basis of lists provided by the military, the ministry of finance and other institutions concerned.

The committee decided to call all stakeholders involved in any way to pension payments, including the ministry of finance, State Bank of Pakistan, Military Accounts, AGPR and CGA to look into the scam in more detail.

The committee was informed that 400,000 pensioners were now drawing pensions through their ATMs without visiting any branch and the entire system would be shifted to ATMs and bank accounts by the end of this year.

The committee was informed that 1.630 million pensioners on the NBP system included 120,000 from the Pakistan Railways, 428,075 from the EOBI, 320,493 from federal government, 173,603 from military and 537,895 from provincial governments.

Published in Dawn, August 19th, 2015

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