SBP governor explains to NA panel why law amendments are necessary

KARACHI: The National Assembly Standing Committee on Finance and Revenue has asked for third party audit of the appointments made by the government in a major bank. The meeting of the National Assembly Standing Committee on Finance and Revenue was held Monday at the State Bank of Pakistan under the chairmanship of Faiz Ullah, MNA.

State Bank Governor Dr. Reza Baqir welcomed the standing committee members. He also remarked that it is a privilege for the SBP to host the standing committee and discuss the issues on the agenda.

According to a press statement issued after the meeting, during the meeting the Governor SBP briefed the committee on the amendments related to SBP BSC Act desired by the SBP and explained that these are required to smoothen the operations of SBP BSC.

With reference to another agenda item of the committee's meeting, related to National Bank of Pakistan, Governor SBP and the Deputy Governor Banking, Jameel Ahmad briefed the committee on the Fit and Proper Test of the incumbent NBP President.

Later, the Governor SBP, Deputy Governor Banking and Managing Director, SBP BSC, Muhammad Ashraf Khan replied to various queries of the standing committee. After a detailed discussion, the committee unanimously passed the Banking Services Amendment Bill, 2020, however, the committee members expressed their concerns over the qualifications required for said position and the difference in the degree (qualifications) of NBP President.

The Deputy Governor explained that the services of Arif Usmani, President NBP were recommended because of his vast (36 years) experience in the banking sector. Faizullah, the chairman of the committee, was of the view that the government should have cleared the allegations, levelled earlier against the President, regarding his previous track record, when appointed him as President of NBP.

Arif Usmani briefed the committee about the hiring status of the employees of the NBP from 2019 to 2020. He stated that the most critical of the element of any organization were people that was particularly true of a service organization such as bank, quality of NBP's senior resources across a variety of discipline were identified as a serious gap as evident by large number of unaddressed audit comments indicate lack of will for resolving them, repeatedly breaches, which resulted in reputational loss and lack of public trust.

He further said that the recruitment process was done by using existing Board's approved policies and process for external recruitment. He informed the committee that all the senior positions were advertised internally (within the bank) accordingly, internal candidates were assessed and eligible candidates were short listed in interviews, however, none of them were found up to the mark.

He added that the new higher positions were very experienced in their disciplines and expert in their role have a proven track record and have worked for top organizations with distinction.

The President NBP also invited the attention of the committee with regard to the accountability process initiated across the board, wherein, two Senior Executive Vice Presidents (SEVPs) and five EVPs were terminated in order make NBP a thriving organization. He was of the stance that the present chain of complaints was a reaction to the disciplinary performance measures being undertaken.

The committee members expressed their concerns over the educational criteria highlighted for recruitment of senior officers in the bank. Some members of the committee apprehended that it seems that there's a violation of the recruitment policies. The President NBP briefed the committee about the newly appointed team in the US and expressed his satisfaction over the procedure adopted in this respect for obtaining the services of well experienced and highly qualified employees in New York.

After detailed discussions, the committee made some recommendations to the Ministry of Finance. The committee recommended the ministry to conduct third party audit on the appointments made by the government in NBP and directed that selection of the audit firm may be made from the existing panel of the SBP.

The meeting was attended by MNAs and Syed Sami-ul-Hassan Gillani, Jamil Ahmed Khan, Amjad Ali Khan, Faheem Khan, Muhammad Israr Tareen, Dr Aisha Ghaus Pasha, Aftab Hussain Siddique, Dr. Ramesh Kumar, Qaiser Ahmed Sheikh and Abdul Wasay.

The meeting was also attended by the senior officers from Ministry of Finance and Revenue, Law and Justice, the State Bank of Pakistan and National Bank of Pakistan.

Copyright Business Recorder, 2020