ISLAMABAD - A top finance and revenue body yesterday blamed the circulation of a huge cache of counterfeit currency notes on ‘some’ banks.
Banks were involved in issuing the fake currency notes that had been used in the purchase of sacrificial animals during Eidul Azha, Senate Standing Committee on Finance and Revenue observed.
Senator Kamil Ali Agha, a committee member, said ‘some banks’ have issued counterfeit currency notes on Eidul Azha, but he did not mention their names.
“Banks keep some bogus notes in the bundles as these can’t be traced out because of lack of counterfeit money detectors,” he said.
Senator Saleem Mandviwalla, the committee chairman, asked the State Bank of Pakistan to set up a stringent system to curb the crime.
However, the SBP officials admitted lack of mechanism and called for bringing in some amendments to the law.
SBP Deputy Governor Riaz Riazuddin told the committee that banks did not get installed machines to scan bogus notes. But, he said that the banks were directed to place these machines by January 2017. “The central bank has already decided to install two counterfeit note detecting machines by March 2016 and tender for the procurement has already been issued,” the committee heard. The SBP deputy governor said they would launch an awareness campaign and prepared a documentary to train people aware of check fake notes.
The committee also asked the central bank to issue directives to banks and exchange companies not to staple dollars because such notes were unacceptable abroad.
The Senate’s body also discussed the State Bank of Pakistan (Amendment) Bill, 2015 granting autonomy and free hand to the State Bank in its functioning.
The committee delayed approval of the bill, as senators wanted to discuss it at length.
“I do not see any big change through this amendment, as it is only cosmetic measure,” Mandviwalla said, adding that the government would appoint the members of the monetary policy committee.
The committee also discussed the Anti-Money Laundering Bill. Finance Secretary Dr Waqar Masood asked the committee to approve the bill during next meeting to be held on October 8.
The senators once again expressed reservation over the inclusion of fiscal offences in Anti-Money Laundering Bill.
Mandviwalla said the Federal Board of Revenue (FBR) proposed inclusion 26-tax offences in the bill that was unfair.
Law consultant of the Ministry of Finance Muneeb Zia said that government had only included tax fraud in the AML bill after the committee’s recommendations. The government had brought down the tax offences to 9-10 from 26, recommended by FBR. The 9-10 offences are related to fraud in Sales Tax, Income tax and Federal Excise Duty, he added.
Mandviwala said the law appeared to have been prepared in haste on dictation of the International Monetary Fund (IMF) because fiscal offenses also include non-filers of tax return.
The committee also termed the government decision to issue $500 million Eurobond at 8.25 per cent interest rate as faulty as it would rate the country with countries like Kenya and Zambia. Mandviwala said timing of transaction was flawed and if current depreciation component were included, the cost of interest would go further up. The finance secretary said, “If we have called it off, we don’t know what would be condition”.