ISLAMABAD – The Senate Standing Committee on Finance on Thursday called the monetary and credit policies announced by the State Bank of Pakistan during the last four years against rules for being in violation of the State Bank of Pakistan Act, as no meeting of Fiscal and Monetary Policies Coordination Board was held since 2007.
The committee, which met with Senator Ahmad Ali in the chair, criticised the SBP’s announcement of monetary and credit policies without approval of the Fiscal and Monetary Policies Coordination Board. No one from the Finance Ministry, despite the fact that Finance Secretary Dr Waqar Masood Khan was present in the meeting, offered any explanation as to why the Finance Ministry had not convened the board’s meeting.
The SBP deputy governor admitted that the announcement of the credit and monetary policies without approval of Fiscal and Monetary Policies Coordination Board was a violation of the existing State Bank of Pakistan Act. When no explanation was provided to the committee by the Finance Ministry, Hamza Ali Malik, SBP’s Monetary Policy director, held the Ministry of Finance responsible for the negligence, as the board was headed by the finance minister and its secretariat managed by the Finance Division.
– approves IDBP bill: The Senate Standing Committee on Finance on Thursday unanimously approved the Industrial Development Bank of Pakistan (Re-organization and Conversion) Bill, 2010, to facilitate its conversion into a banking company. If the bill is approved by parliament, the Industrial Development Bank of Pakistan would be treated as a banking company with name of Industrial Development Bank Limited.
The Senate Committee headed by Senator Ahmed Ali, considered the IDBP (Reorganization and Conversion) Bill, 2010, and unanimously decided to approve the bill immediately in order to save the national kitty from further losses. Dr Waqar Masood Khan, the finance secretary informed the meeting that the Federal Cabinet had already ordered an enquiry into the losses of the IDBP.
A team, comprising State Bank of Pakistan, Federal Investigation Agency and Ministry of Finance has recently completed a report on the losses and submitted to the Federal Cabinet, Masood said. He added that the recovery of the IDBP loans was being strictly monitored.
Masood informed the committee that following the approval of the IDBP (Amendment) Bill 2010, the government and SBP would be able to formally convert the IDBP in to IDBL. He said the Ministry of Finance would pass a vesting over the next six months for the transfer of assets of IDBP to IDBL and the SBP would monitor the IDBL privatisation, he said.
Masood also assured the committee that IDBL would be sold to a company that would have the required experience of running a banking company.
