ISLAMABAD: The Public Accounts Committee (PAC) has directed a forensic audit of $3 billion soft loans given to various companies and individuals during the Pakistan Tehreek-e-Insaf (PTI) tenure, JEE News reported on Thursday.
Governor State Bank of Pakistan Jameel Ahmed agreed to share the list of borrowers in an in-camera meeting during the committee meeting.
$3 billion in soft loans extended during the COVID-19 pandemic.
Chairman Noor Alam Khan presided over the meeting which was also attended by Secretary Finance and Governor State Bank.
Additionally, the committee included representatives from the Ministry of Defence, the Ministry of Commerce and the Office of the Auditor General to investigate the matter.
MNA/Chairman @NOORALAMKHAN presided the meeting of Public Accounts Committee (PAC) at Parliament House.@NAofPakistan#NACommittee pic.twitter.com/2SJY6d2hKE
— Committees of NA (@NA_Committees) July 5, 2023
It was revealed that textile, cement, tire and auto industries took loans worth $3 billion at 5 percent interest under the refinancing scheme during the PTI government.
Khan directed the State Bank to share the list of borrowers with the committee in an in-camera meeting within three days.
He said that on April 19, the State Bank of Pakistan was asked under Article 66 of the Constitution to submit the records of loans given to 620 people but it was not given.
The PAC chairman inquired whether lending at 5% benefited the economy.
PAC member Burgis Tahir said that the names of 620 beneficiaries should be given to the committee.
The finance secretary said that this was a refinance scheme which is the mandate of the State Bank, adding that the scheme was implemented by commercial banks and the necessary information was between the bank and the client.
He told the committee that the scheme was launched in March 2020 after the Corona epidemic and was initially for one year, with no foreign exchange component.
The scheme was for the import of industrial sector and machinery and was revised up to 5%.
“More than 85% of the loans are from private banks. Of this, 42% of the borrowers are from the textile sector,” he told the committee.
“We are worried because most of the companies do not repay the loans and open companies with new names,” Khan said.
Additionally, Ahmed said the State Bank has a list of borrowers. However, the details of the loan were confidential between the banks and the customers.
He told the committee that 394 billion rupees have been released under the scheme so far, it should be noted that the loans have been distributed in Rs.
He further told the committee that in this scheme, the government and State Bank did not do any risk sharing and commercial banks gave loans to their borrowers.
He told the committee that when the scheme was launched, the interest rate was 9 percent which was later reduced to 7 percent.
“The scheme was used only for the purchase of machinery,” the State Bank governor said.
Khan questioned whether the State Bank or the government made the policy and why the names of these companies could not be disclosed.
Governor State Bank replied that a refinance scheme can be given under the State Bank Act and approval is sought if a scheme involves government risk sharing.
He said that we can give a briefing about the benefits of this scheme.
Khan said that representatives of the Ministry of Commerce, Planning and Defense should be included in the investigation team.
The committee ordered a forensic audit of the $3 billion loan and directed that a representative of the Ministry of Defense be included in the inquiry.
The State Bank Governor suggested that an in-camera briefing would be appropriate instead of making the list of borrowers public.
The PAC chairman agreed to the proposal and agreed to hold an in-camera meeting.
