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February 16, 2009
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Monday
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Safar 20, 1430
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Bank frauds up by seven times, says NAB
By Zulqernain Tahir
LAHORE, Feb 15: There has been a seven-time increase in banking sector frauds in Punjab in 2007-08 as compared to the corresponding period, according to the National Accountability Bureau (NAB).
During the last year, over 50 inquiries and investigations relating to the banking sector frauds involving an amount of Rs2.69 billion have been in progress under NAB-Punjab.
The NAB statistics further say that 42 such references involving Rs13.67 billion are under process in the accountability courts. During the period 2006-07, only six cases related to the banking sector frauds had been filed with the bureau.
According to a senior NAB official, unprecedented increase has been witnessed in the banking frauds, which should be taken very seriously by the State Bank of Pakistan (SBP), and it must take necessary measures to stop it. The NAB says the multi-facet frauds include misappropriation of deposited amount by (bank) staff, misuse of depositors’ accounts for personal business, running parallel banking network within the branch, processing hefty loans through fake collaterals, misappropriation of pledged goods, theft of blank-drafts and grant of fake loans in connivance with bank staff.
Giving an example, the bureau says the staff of a bank invested over Rs200 million from the depositors’ accounts in the Lahore Stock Exchange. Similarly, in the mega Bank of Punjab scam, Rs9.2 billion loan had been issued on fake CNIC, factitious accounts and over-valued mortgages in connivance with the bank officials. The case has been pending in the Islamabad High Court.
The NAB says there has been a common practice of over-estimating the assets mortgaged against the loans. It results in monetary loss to the bank concerned in case of a default. The bureau has urged the SBP to check the malpractice.
In addition to this, eleven bank loan-default references worth over Rs1 billion and 22 references relating to other financial scams worth Rs5.7 billion have also been under process in the accountability courts.
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