Issuance of interest-free loans: PAC seeks list of firms, individuals benefited during PTI tenure

ISLAMABAD: National Assembly’s Public Accounts Committee (PAC) on Tuesday sought the list of 620 individuals and companies who benefited from the alleged issuance of interest-free loans worth $3 billion under Temporary Economic Refinance Facility (TERF) during the previous Pakistan Tehreek-e-Insaf (PTI) government.

The committee, which met here with its chairman Noor Alam Khan in the chair sought the records of loan and the list of the borrowers from the Finance Division, the Federal Board of Revenue (FBR), the Federal Investigation Agency (FIA) today (Wednesday).

The PAC chairman further requested cooperation from the chief of army staff (COAS), and the secretary of defence to depute personnel from spy agencies in the investigation.

Noor Alam warned that if relevant departments did not provide the relevant information to the committee, he would take action against them. The economy was in a shambles and there was loot and plunder, the chair observed.

During the meeting, the chairman committee said that 620 people were given loans worth $3 billion during the PTI’s government at a zero percent interest rate. The committee was also informed that one company was given a $1 billion loan.

The central bank had also written a letter to the committee, saying that it was not interest-free loan disbursed to the companies during Covid epidemic and for the promotion of export and industrialisation.

In April 2023, the committee then directed the SBP to provide the complete list of persons who took loan at zero percent interest rate. The committee had also sought a report from the FIA which was pending.

Former finance minister Shaukat Tarin had already dismissed allegations made by the PAC chairman in April 2023, accusing Tarin of dubious transactions worth billions of dollars under a central bank scheme aimed at giving low-markup loans to businesses. In a statement, Tarin said the loans on nominal markup were part of post-Covid monetary stimulus measures taken by the previous government.

Tarin said in the statement, “SBP is an independent institution and operates multiple refinance facilities for businesses, including the Exports Finance Scheme (EFS) and the Long-Term Financing Facility (LTFF).”

PAC Member Mohsin Aziz said the scheme helped to boost the export to $4 billion during the period and the committee should also look into the benefit of the scheme. He further said that such schemes were introduced by previous governments. He, however, endorsed the chairman to bring the list of beneficiaries.

At one point, Mohsin Aziz and Barjees Tahir exchange harsh words but agreed to discuss the list of 620 beneficiaries.

Another Member Committee Dr Mukhtar, however, suggested the committee direct the Auditor General of Pakistan (AGP) to hold a performance audit of the scheme.

Copyright Business Recorder, 2023