SBP governor objects to amendment

ZAHEER ABBASI

ISLAMABAD: Senate Standing Committee on Finance refused to approve

the Credit Information Bureau (CIB) bill designed to hand over to the private sector after members of the committee remained unconvinced by assurances of Secretary Finance and Governor State Bank of Pakistan that it would not be used for political victimization.

The committee meeting chaired by Saleem Mandivwala decided to return the bill along with proposed amendments to the Senate for discussion with the majority of the committee members urging the strengthening of SBP and creation of another department within the ambit of regulator instead of handing over CIB to the private sector.

Secretary Finance Dr Waqar Masood and Governor SBP Ashraf Mehmood Wathra urged the committee to approve the bill otherwise it would lapse in the next few days and the entire process would be reinitiated from step one. Upon this, Mandivwala stated that committee has suggested some amendments to the law and if government is ready to accept and amend the law, the committee would be ready to approve it.

Governor SBP after discussing the proposed amendments with his legal team said he would not accept one of the proposed amendments because it would negate the entire process. He added that he would have no issue in accepting the rest of the amendments. Governor SBP said “we will not agree to the amendment that SBP should verify each report of the CIB, which would be established in the private sector after approval of proposed law because it would imply the establishment of yet another supra body”. He added that of the 126 countries, CIBs are operating only in four countries in the public sector, whereas in other countries these are run by private sector.

Secretary Finance Dr Waqar Masood also requested the committee to approve the bill without any amendment as any change at this stage would require reprocessing the law, which has already been approved by the National Assembly. Senator Kamil Ali Agha said that committee should reject the bill if government was not ready to accept their amendments and other members of the committee endorsed his suggestion. Another member said that the bill has some political elements and can be used for political victimization and also questioned the need for giving it to the private sector. Saleem Mandviwala said that no one is in favour of passing the CIB bill in its current form.

The committee also constituted a sub-committee headed by Senator Mohsin Leghari to thoroughly investigate privatization transaction of Heavy Electrical Complex (HEC) as committee members expressed total dissatisfaction at the explanation given by the chairman privatization commission. They said that the company was disqualified because its cheque bounced and not because of due diligence process carried out by the privatization commission. There must have been some serious lapses otherwise the company which was registered one day after the decision was taken to sell the HEC would not have qualified in the bidding process. This reflects that due diligence was totally bypassed and ‘even my drivers could have qualified’, said Senator Mohsin Khan Leghari

Chairman Privatization Commission said that may be some Board members had shared information with the company because it was public information after the decision of privatization of HEC but added that he was not privy to information sharing. Responding to a question, Governor SBP said this was standard practice in various countries that parent company prefers a subsidiary for making investment abroad and same was in HEC’s case. The committee also decided to hold an exclusive meeting on Politically Exposed Persons (PEPs) issues because this kind of restriction on any section of society was violative of basic constitutional rights. Chairman of the Committee said that French Ambassador has also approached him that SBP has come up with some new requirement for their ADP-I (French State Agency) with respect to transfer of consultancy fee in Euro. Secretary Finance assured him that he get in touch with all the concerned and try to get the issue resolved. The committee also decided to summon the National Accountability Bureau (NAB) in the case of a bank after the Governor SBP informed the committee that after the decision of the privilege committee 39 files pertaining to that bank’s privatization were handed over to NAB. However, he added that these files were returned by NAB with comments that no such decision was reflected in the minutes of the committee. The committee also decided to put off the KASB issues because the issue is sub-judice.