The Senate Standing Committee on IT and Telecommunications on Thursday sought details from the National Telecommunication Company (NTC) about the approval of investment of Rs 1.74 billion in private banks during 2014.
The directions were given by the committee headed by Senator Shahi Syed. Senator Rehman Malik demanded that complete details of the investment process and minutes of the company board’s meeting should be provided to the committee to ascertain the truth.
He asked who had ordered the company to make the investment and whether it was allowed under the law that a state owned entity could deposit its money in private banks. The company officials said that the investment was made as per the company’s investment policy, approved by the NTC Management Board and in compliance with the guidelines of the Finance Division of July 2003 and September 2004.
The NTC had invested Rs 1.7 billion in the National Bank of Pakistan (NBP), Bank of Punjab (BOP) and Samba Bank in January 2014. NTC invested Rs 450 million in NBP in January 2014 for six months tenure with 10.40 per cent interest rate, while an amount of Rs 654.8 million was also invested in the NBP in January 2014 with six months tenure on 10.40 per cent interest rate.
The NTC invested Rs 333.5 million in BOP in January 2014 for one year tenure with 10.65 per cent interest rate while an amount of Rs 303.6 million was invested in Samba Bank in January 2014 with six months tenure on 10.40 per cent interest rate.
The NTC officials said instructions of the Finance Division and the NTC investment policy allowed to place funds with minimum “A” rated banks whether in the public or private sector. However, to give more security to funds, the NTC funds were placed with banks having “AA” and above credit rating in the long term. They said that investment in these banks was approved by the NTC Audit Committee and the NTC Management Board. The committee directed them to provide documents and minutes of the meeting within a week to ascertain the truth.