ISLAMABAD: The National Assembly’s Standing Committee on Finance on Wednesday unanimously approved a resolution demanding that the federal government should reduce interest rates on agriculture loans to single digits.

However, PTI MNA Asad Umar termed the resolution a “useless exercise”. MNAs who had submitted a call-attention notice to the National Assembly regarding high interest rates on agriculture loans were invited to the committee meeting by its chairman Qaiser Ahmad Sheikh.

Members belonging to the PML-N, PPP and PTI made speeches criticising banks for charging high interest rates on agriculture loans. Zarai Taraqiati Bank Limited (ZTBL) charges around 14 per cent interest on such loans, it was noted.

“Currently, the (benchmark) interest rate by the State Bank of Pakistan (SBP) is less than 6pc,” PTI MNA Jahangir Tareen said. “Banks give loans at 6-7pc to industries. Therefore, agriculture loans should be given at around 8pc only,” he said.

His point of view was supported by all sides, including Dr Nafisa Shah of the PPP. The meeting witnessed uproar when its chairman asked the senior managements of ZTBL and National Bank of Pakistan present on the occasion to present their points of view.

Senior executives of ZTBL made a brief presentation that shed light on the reasons for high markup rates. They said ZTBL pays 7.5pc markup to the SBP, noting that there was a need for restructuring the bank set up to promote agriculture financing.

At this point, Rana Muhammad Hayat of the PML-N interrupted their presentation. “You get money at 6pc and give it to us at 16pc. We want markup rates to go down to single digits. If that is not possible, then ZTBL should be closed down,” Mr Hayat said.

Mr Umar said interest rates on agriculture loans will never come down this way because parliamentarians are not listening to the real issues.

“How will closing down ZTBL benefit the farmers? Besides, the committee should work to address the issues faced by public-sector banks,” he said.

He was informed that the finance minister was also serious about the issue and that his seriousness in this regard would be reflected in the upcoming budget.

The idea of Parliamentary Secretary on Finance Rana Afzal Khan of the PML-N about the provinces sparing some funds to protect the interests of farmers was opposed by committee members belonging to the PML-N, PPP and PTI. Earlier, the committee took exception to the lack of enthusiasm shown by the National Accountability Bureau (NAB) in finalising the inquiry into the NBP Bangladesh scam.

NAB Director General Zahir Shah told the committee that a reference has been finalised and NAB will register it in court in a few weeks.

However, Rashid Godil of the MQM interrupted his briefing, saying the case was forwarded to NAB in April 2015 and it still remained inconclusive.

The members unanimously decided to write a letter to the NAB chairman to finalise the reference in one week and forward the approved copy to the committee.

After considering the petition by NBP pensioners, the committee recommended that the bank should periodically increase the pensions of its retired employees as per the government’s policy.

Published in Dawn, March 16th, 2017