ISLAMABAD: More than $7.9 billion has been taken out of the country through foreign currency accounts in the last five years, National Assembly Standing Committee on Finance was informed on Wednesday.

The law allows individuals to take dollars out through these accounts whereas special permission is needed to remit money out of the country for investments, the committee was informed by an official of the State Bank of Pakistan (SBP).

He added that individuals were granted permission to bring, hold and take out money under the Protection of Economic Reforms Act 1992.

The description by the official brought in a barrage of queries, prompting the committee chairman to inquire if any foreign currency account holders can buy dollars from the open market and remit it out of the country.

“There are certain barriers in the process but legally the account holder can do so,” Director SBP Irfan Ali said in his reply to the committee.

In response, PTI’s Asad Umar quoted data from Dubai Land Records that Pakistanis hold property worth $6.6bn in the city.

“You have a stringent policy for investing from Pakistan to anywhere abroad but there is no check on individuals to buy property abroad if they hold foreign currency accounts,” Mr Umar said.

Meanwhile, possibly sensing the direction of the discussion Mian Abdul Mannan and Muhammad Pervaiz Malik of the PML-N tried to disrupt the briefing by the SBP official and repeatedly said the law was clear and there was no need to talk over the matter.

MQM’s Abdul Rashid Godil questioned who was in power in 1992 when the ‘flawed law’ was made.

Before an official response could be heard, Mr Umar responded: “The first offshore company was established in 1992 and foreign currency accounts with such immunity was made in 1992 so things are clear.”

Responding to a query, the SBP officials informed that in India, the law does not allow resident Indians to hold foreign currency accounts.

“They say that all your dealing in India is in rupee so why do you need a dollar account,” Mr Ali said.

To this, Mr Umar quipped, “Because they do not have Mian League there.”

The committee was also informed that to establish business abroad permission was needed from the SBP if the amount remitted was up to $5 million. If the amount crosses the $5m limit, permission is granted by the Economic Coordination Committee (ECC).

In the last three years, permission has been granted to take out $601m abroad for establishing businesses, the meeting was informed.

62,000 apply for youth loan

The committee was informed by the top management of National Bank of Pakistan (NBP) that only 62,000 applications have been received for the PM’s Youth Loan Programme and of these only 15,000 applications have been approved.

“During the past two and a half years, the National Bank has processed around 8,100 applications and disbursed some Rs7.7bn,” NBP President Syed Iqbal Ashraf said. “We will hopefully process around 13,500 applications by the end of the year,” he added.

MNAs belonging to the ruling party expressed discontent over the slow pace of processing applications and low approval rate.

The committee was briefed by the national Accountability Bureau (NAB) official over the inquiry against NBP’s operation in Bangladesh which caused loss to the bank in shape of loan defaults.

NAB is expected to finalise its report and frame charges during the month of September. A request has been forwarded by NAB to place five NBP serving and retired officials on ECL.

Published in Dawn, August 25th, 2016