ISLAMABAD - The State Bank of Pakistan (SBP) on Wednesday said that around $7.9 billion capital had flown out of the country in the last five years from foreign currency accounts opened under the protection of Economic Reforms Act 1992.

The SBP officials informed the National Assembly's Standing Committee on Finance that there was no bar on transferring money abroad through foreign currency accounts.

They informed that $1 billion were transferred abroad in the fiscal year 2010-11, $1.2 billion in the year 2011-12, $1.9 billion in 2012-13, $1.8 billion in 2013-14 and $2 billion were transferred in the year, 2014-15.

The bank officials further informed that only $600 million had been transferred for the investment purpose.

However, when the officials showed complete ignorance about the purpose behind the transfer of the remaining money, the committee members expressed serious reservations over the law, which allowed transfer of the capital abroad.

"This is a strange law, which allows the capital to move out of the country through foreign currency accounts," said a committee member, Asad Umar, of PTI.

He added that people were purchasing properties in foreign countries by moving capital out of Pakistan. He demanded constitution of a sub-committee to probe the matter.

Committee chairman Qaiser Ahmad Sheikh noted that the Economic Reforms Act 1992 paved the way for moving capital out of the country. “SBP should apply Anti-money Laundering Act on these cases.

SBP director informed the committee about the investment made by the Pakistani companies and individuals abroad with permission of the SBP in the last three years.

He said that investment abroad was allowed only for those countries that allowed return of profits, dividends and capital. He added that applications under equity investment abroad up to $5.00 million had been approved by the SBP and applications for equity investment abroad above $5.00 million had been sent to ECC for approval.

The committee also discussed Prime Minister’s Youth Business Loan (PMYBL). It was informed that the pace of disbursing loan was very slow, as only Rs7.7 billion had been disbursed under the programme in the last three years.

The members were further apprised by the NBP President that the bank had approved 15,787 applications so far and released loans for 8100 individuals.

NBP President briefed the committee about the bank’s performance  He said that NBP had lent Rs96 billion for the agriculture sector.

The committee recommended to NBP to furnish growth/profit comparison statement with other banks.

The members also showed their reservations over the promotions and transfer policies adopted by the bank.

The NBP President informed that presently, 16000 employees were working in the bank, higher than its requirement.

The committee decided that NBP would furnish its recommendations for further reforms/improvements in its functioning. The NBP President also stated that NBP had developed its automation system.

National Accountability Bureau (NAB) director informed the committee about the status of the inquiry/investigation into NBP Bangladesh scam.

He said that investigations would be completed in September, 2016 to which the committee replied by assigning him the duty to submit report after one month.

Asad Umar reiterated that the committee should ask the Federal Board of Revenue (FBR) for a briefing on Panama Leaks. However, Qaiser Ahmad Sheikh, Chairman of the Committee, said that the FBR chairman had already informed the committee about the ongoing process in this regard.

Meeting was attended by Mr. Muhammad Pervaiz Malik,  Mian Abdul Mannan, Ms. Shaza Fatima Khawaja, Syed Naveed Qamar Mr. Asad Umar and Mr. Abdul Rashid Godil, MNAs and besides senior officers from Ministry of Finance & Revenue, NBP, SECP, NAB and SBP.