ISLAMABAD: A Senate committee has sought a report from the State Bank of Pakistan (SBP) on discriminatory treatment of parliamentarians, media personnel and others by banks and rejected a draft bill for regulation of credit bureaus for being against public interest in its current form.

Chairman of the Senate’s Standing Committee on Finance and Revenue Salim H. Mandviwala told journalists that the issue of discrimination against certain professions by the banks had been put on agenda of the next meeting after members of the committee raised serious questions on the last day of its two-day session on Thursday. The SBP has been asked to come up with a report on the issue.

The matter came up for discussion when Chairman of the Privatisation Commission Mohammad Zubair told the committee that political influence in the grant of loans and their waivers was “out of the national narrative after successful privatisation of the banking sector”.

Kamil Ali Agha of the PML-Q said a new phenomenon of ‘politically exposed persons’ had emerged in the banking sector under which certain professions were not entertained by banks for extending loans and wondered if it was government policy now.

Mr Zubair said the government had not put any restriction and that being in the private sector the banks themselves took commercial decisions.

It was an infringement of the fundamental rights of the citizens if the SBP, the government or the banks discriminated against politicians, media personnel or other professionals, Mr Agha said. An explanation was warranted from the central bank.

Talha Mahmood of the JUI-F said that members of certain professions were discriminated against not just when they applied for loans but also when they sought to open bank accounts. “As soon as you mention your profession as a politician or media person, the banks create many problems as if they are dealing with criminals,” he said.

Mr Zubair said the government had no policy of discriminating against any group, but confirmed that in some cases anchors drawing salaries in millions could not secure small loans because of internal decision-making process of the private banks. Similar was the case with lawyers, politicians and some other sections of society, he said.

CREDIT BUREAU BILL: The committee refused to approve a draft bill as proposed by the SBP for regulation of credit bureaus. The committee felt that the bill was against the interests of the public even though its supporters wanted it to be approved quickly because the National Assembly had already passed it.

The meeting noted that the SBP wanted to absolve itself of its responsibility and pass it on to private companies whose credentials were not satisfactory.

There were insufficient safeguards if a politician was disqualified or a consumer denied a credit facility on the basis of a faulty report of a private credit bureau.

Senators pointed out that the proposed bill also empowered the private credit bureau to collect data about 200 million citizens even on the basis of house rent they paid or cleared a loan of a few hundred rupees from a private party.

They said the committee was not required to follow the National Assembly without applying its own mind.

Barrister Mahmood Mand­viwala, co-opted by the committee for an expert opinion, said most of the reservations expressed by the senators were valid and pointed out a few weaknesses in the draft.

For example, he said, the secrecy and confidentiality under the central bank’s credit information bureau and the Banking Companies’ Ord­inance was a tried and tested issue which was not taken care of in the draft bill.

Secondly, the existing SBP arrangement took care of companies’ information, but when it came to individuals for microfinance and credit card deals on the basis of private credit bureaus, there should be phased limits for coverage.

Published in Dawn, June 26th, 2015

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