SHC orders Sindh Bank to block all zakat cards with open pin code

Published May 11, 2021
The bench observed that the disbursement of the zakat funds needed to be examined. — Wikimedia Commons/File
The bench observed that the disbursement of the zakat funds needed to be examined. — Wikimedia Commons/File

KARACHI: The Sindh High Court has expressed resentment with provincial authorities over the method to disburse zakat funds and directed the Sindh Bank to immediately block all open pin code zakat cards and ensure that the amount was paid through biometric verification system as agreed with the National Database and Registration Authority.

A single bench of the SHC headed by Justice Salahuddin Panhwar observed that apparently the bank was violating the rules of 2016 by issuing and handing over around 200,000 ATM cards to zakat offices with open pin codes.

It also expressed surprise over the admission of the religious affairs secretary about a lapse of zakat healthcare fund and said it was the responsibility of the Zakat Council to use the amount smartly for different heads when objective thereof was rehabilitation and assistance to needy people.

The bench observed that the disbursement of the zakat funds needed to be examined and the authorities concerned should submit a report about the criterion for disbursement of zakat on Aug 8.

The bank has issued over 200,000 ATM cards with open pin code to zakat offices in Sindh in violation of SBP rules

It also asked the secretary of the Zakat Council to launch a website of the council within two months and update complete record enabling everyone to know about the release and utilisation of the zakat amount in accordance with law.

When the bench took up the matter about zakat funds’ distribution, religious affairs, zakat and ushr secretary Athar Hussain Bugti submitted the details of disbursement of zakat during the last two years.

However, he admitted that the Guzara allowance cards like ATM cards were issued by the Sindh Bank with open pin codes and were received by the head office collectively and thereafter the Zakat Council sent them to different districts for distribution.

He further submitted that in 2018 number of beneficiaries was 90,851 and in 2020 it stood at 188,186.

Sindh Bank’s senior vice president Syed Zeeshan-ul-Haq also conceded that every year they generate Guzara allowance ATM cards and hand them to the Zakat Council with open pin codes.

The bench observed that the issuance of open pin code card was quite surprising as the same was in complete negation to clause 2(2.5) of the Sindh Zakat Disbursement Procedure and bank was also violating the rules and guidelines issued by the State Bank of Pakistan in 2016.

It further said the open pin code cards, prima facie, meant that same could be used by anybody and this method of payment to the needy and deserving people would fall under heavy clouds.

An assistant advocate general submitted that a memorandum of understanding was signed by Nadra, Zakat Council and Sindh Bank around one and a half years ago that all amount of Guzara allowance will be paid through biometric verification system and for such purpose the Sindh government allocated Rs5 million as cost required by Nadra, but the mechanism was not yet in the field due to the pandemic.

However, the bench said that all three components in question were functioning, thus the plea of pandemic for not getting agreed mechanism functional was not logical.

The religious affairs secretary submitted that in order to maintain transparency it would be in the interest of justice to ensure that all amount was distributed through the biometric verification system by bank to individuals registered with the Zakat Council.

However, the bench said that it was the absolute responsibility of the council to ensure direct payment to the deserving people through prescribed procedure ie cross cheque or E-Sahulat card with biometric verification without allowing any involvement of anybody else in such process.

The court said it could not allow continuity of practice of such cards with open pin codes and the same were hereby stayed and be blocked immediately.

It also directed the provincial government to make sure immediate satisfaction of a signed MoU to ensure functioning of biometric procedure for payment of Guzara allowance and all other authorities concerned must extend every cooperation in making such practice functional.

The secretary further conceded that the role of the chairman of the Zakat Council was excluded in the disbursement of the healthcare amount distributed to districts through a committee to zakat local councils and medical superintendents of hospitals concerned.

About the social welfare and rehabilitation funds, he said that there were approved institutions and the Zakat Council was required to release funds to those institutions like orphanages, disabled persons, but unfortunately in majority of districts such institutions did not exist; hence the amount lapsed every year.

The bench remarked that the admission of the lapse of the zakat funds’ amount was quite strange, particularly when it was the responsibility of the council to use the amount smartly.

It directed the Zakat Council to consider joint marriages, which would lessen the expenditure.

Published in Dawn, May 11th, 2021

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