PAC Directs Auditor General to Conduct Audit of State Bank Over TERF Loans

The Public Accounts Committee (PAC) Tuesday directed the Auditor General to conduct an audit of the State Bank of Pakistan (SBP). The directions came during a meeting of the PAC that took up the matter of loan disbursement under the Temporary Economic Refinance Facility (TERF). The National Accountability Bureau (NAB) and Auditor General presented a preliminary report regarding the matter. NAB officials told the committee that the loan scheme was launched by the State Bank of Pakistan Governor back in March 2020. Under the scheme loans worth Rs. 1,145 billion were disbursed. The officials further said that initially, the interest rate on these loans was 7 percent which was later cut to 5 percent. Moreover, initially, the scheme was planned to run for one year but it continued till June 2023. Commercial banks also disbursed loans under the scheme. Senator Saleem Mandviwalla questioned how the central bank gave loans in dollars when the country was facing an economic crisis. Senator Mushahid Hussain Syed said that he doesn’t think there have been any irregularities in the disbarment of loans. PAC Chairman MNA Noor Alam Khan said that the current SBP governor was the deputy governor at the time the scheme was launched. He hinted that the incumbent governor may “try to save his colleagues”. Khan said that we have directed the relevant institutions to conduct an inquiry into whether the loans were disbursed on merit or not. Subsequently, the PAC directed the Auditor General to conduct an audit of the central bank.