In a time when the public conversation has become increasingly focused on the financial accountability of the political and business elite, it seems the country does not have the appropriate mechanisms for increased financial transparency. Last week, the State Bank of Pakistan told the Senate that it cannot share the details of written-off loans with parliament. The SBP cited legal opinion and existing laws to claim that sharing the details of those who got loans written off during the last five years would be a breach of existing law. The Senate Committee on Rules and Privileges had asked the SBP to share the relevant details. Now, the SBP and Senate Committee will seek further legal opinion on whether the law barring sharing of banking information applies to parliament. The situation has opened up serious questions about the laws pertaining to banking practices in the country. While anonymity of the contents of bank accounts is itself understandable, the decision to write off loans is one that affects public finances and adds to the country’s financial burden. How can financial transparency laws not allow the sharing of such essential information?
It is estimated that the value of written-off loans is over Rs260 billion. In the last 30 years, at least a thousand companies have had their loans written off. If this information cannot be made public or the reasons behind such write-offs cannot be shared, it puts into question both how the SBP makes these decisions or the credibility of the entire banking system. Around 10 years ago, a case was lodged in the SC questioning why banks relentlessly pursued those who take out small loans while those who took out loans for billions were given write-offs. Now, the Senate has also wondered that if parliament can get in-camera briefings on intelligence agencies, then what is the national interest in hiding the details of loan write-offs. Written-off loans cannot be matters of national security. The fact that their details cannot even be shared with parliamentarians will raise further suspicions in the minds of the public on the financial transparency of our political and economic system. If there is a legal restriction on sharing the details of loan write-offs, the government and the SBP would be well advised to find a way to remove it soon.
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