Banks bound to maintain secrecy of accountholders: LHC

The Lahore High Court (LHC), while dismissing an appeal filed by State Bank of Pakistan (SBP), has observed that banks are bound under Banking Companies Ordinance, to keep secret details of its accountholders. The SBP had approached the court against the decision of a single bench of the august court, which struck down a circular of SBP directing the financial institutions to provide information about those accountholders to CBR who are getting profit Rs 10,000 or above per annum.
The petitioner, a senior member of the Lahore High Court Bar Association (LHCBA) had challenged the circular in question. The petitioner contended that declaration of banks' profit would attract heavy taxation and penalty not only on profit but also on the principal amount of deposits. He submitted that impugned circular seems to be an act of a lobby, which is working against national interests. He prayed that the impugned circular may be declared ultra vires of the bank secrecy laws and therefore be set aside. He also contended that the impugned circular is illegal, unfair and against the national interests.
The court, while hearing the appeal at length, dismissed the appeal of the SBP.