ISLAMABAD: The State Bank of Pakistan (SBP) on Thursday confirmed that 190 million pounds from the UK’s National Crime Agency (NCA) had been received by the National Bank of Pakistan (NBP) on account of a settlement with property tycoon Malik Riaz Hussain’s family, but declined to share details.

Testifying before the Senate Standing Committee on Finance and Revenue, SBP’s deputy governor Jameel Ahmad said: “The payment has been received by the National Bank of Pakistan, but the question about the account in which it has been kept should be addressed to the government of Pakistan.”

The disclosure followed a heated discussion among the participants of the meeting presided over by Senator Farooq H. Naek, who instructed SBP governor Dr Reza Baqir to attend the committee’s next meeting to respond to various questions being raised by senators.

Finance ministry spokesperson Omar Hameed Khan was not available to explain in which account the funds received from NCA had been kept. Another senior official told Dawn the ministry was unaware about the funds, their sources and nature, except that these had been received in the NBP’s branch in Supreme Court of Pakistan, Islamabad.

Heated discussion in Senate committee after central bank’s official declines to share details of the transaction

Last week, special assistant to the prime minister Shahzad Akbar had said the funds would be transferred to the Supreme Court’s NBP account and the federal government had requested the court to transfer the money to its account for spending on social welfare.

The matter came up for discussion on Thursday when Senator Mushahidullah Khan of the PML-N asked if the proceeds coming from the NCA purportedly “on account of some crime settlement” were going to the Supreme Court or the SBP and why they were not being deposited in Account No 1 of the State of Pakistan.

In response, SBP’s deputy governor said the funds had nothing to do with his organisation and questions about the issue at hand should be referred to the government.

He, however, said he could confirm that the funds had come directly to the NBP.

At this, Senators Khan and Talha Mehmood asked whether or not every foreign transaction was required to be reported and transferred through the central bank and more so when this pertained to the State of Pakistan.

Mr Ahmed said the transactions could also be routed through the banks that in turn were required to report it to the SBP in general terms. In such cases the SBP might not be informed in which accounts such funds were kept.

“We cannot share with you more information on this,” he added.

Senators Mehmood, Mian Ateeq Shaikh and Dilawar Khan retorted that it was unacceptable for an institution to refuse to share certain information with parliament and that they might bring a privilege motion because all agencies, departments and institutions were bound to share “anything and everything” with the parliamentary panels.

They demanded that the SBP’s deputy governor be banned from attending the meetings of the standing committee.

A representative of the law ministry told the committee that even under right to information law every institution and agency of the state was bound to share information with the public, subject to certain limits required by law, but the parliament was the supreme institution and all agencies and departments were required to provide all the information to parliament when asked.

Senator Khan asked if the SBP was “lifting” currency from the forex market and if so how much. Mr Ahmed said it was a normal function of the central bank to pick up foreign exchange from or release it into the market, but the SBP would not publicly share such details.

The central bank was picking up about $20m or so from the market on a weekly basis and was not allowing the rupee to appreciate for some reasons, Mr Khan said.

In response Mr Ahmed said the numbers quoted by the senator were not correct.

Chairman Naek ruled that the SBP governor attend the next meeting of the committee and give a briefing on the state of the national economy.

Published in Dawn, December 13th, 2019