ISLAMABAD: The Senate Standing Committee on Finance on Wednesday called for an immediate end to discrimination of politically-exposed persons (PEPs) by banks and the provision of loans to the private sector of all provinces proportionate to their deposits.

The meeting of the panel presided over by Senator Talha Mahmood also sought a complete report on the repatriation of 190 million pounds sterling by the National Crime Agency (NCA) of the UK to Pakistan within three weeks.

The committee unanimously approved the State Bank of Pakistan (Amendment) Bill 2021 moved by Senator Mohsin Aziz with certain amendments which called for the extension of loans to the people of a province to 60pc of their deposits. The bill originally suggested that the SBP should ensure that the minimum credit limit to the private sector for establishing industry and commercial activities shall not be less than total deposits received by scheduled banks or financial institutions from that province, or as the case may be, the Islamabad Capital Territory.

Directs banks to stop discrimination of politically-exposed persons

It sought to rectify unjustified and inequitable credit lending that has been the long-standing demand of smaller provinces. State Bank of Pakistan (SBP) Governor Dr Reza Baqir proposed that the committee should have the opinion of the relevant stakeholders including the Pakistan Banks Association and the respective banks as well.

He said the SBP was equally concerned over low lending ratio but could not interfere in the credit decisions of the banks, as some of them were in the private sector and few in the public sector.

In cases where the ownership of the banks was of the public sector, these banks should be specially directed through their boards to do lending in the under-served areas of Balochistan and KP. The management of those banks should be answerable.

Published in Dawn, March 3rd, 2022