SBP yet to recocver Rs 1508 mn from a forex dealer



ISLAMABAD: State Bank of Pakistan advanced Rupees 1508million to a forex dealer in year 2000, when Dr. Ishrat Husain was the Governor of the Bank, to buy US dollars from the market and then almost Rupees 493 million never got recovered.

Dr Ishrat Husain currently is Advisor to the Prime Minister on Institutional reform.

Auditor General of Pakistan’s report points out that State Bank of Pakistan has failed to recover money from Malik Muhammad Bostan Khan, one of the most powerful private sector forex dealer in the country, despite this being recoverable since the year 2000.

State Bank was reminded of the lapse in recovery in the Auditor General Pakistan’s office reminding the financial regulator of the country in August 2018 that it has failed to recover the amount. The state bank continued to hide behind legalities and technicalities by saying that the case was under arbitration and scheduling of the hearing and the subsequent judgment for the case are not in the direct control of the bank. AGP’s report has found these responses as unsatisfactory.

The AGP report points out that a large sum of Rupees 1508 million were advanced to Malik Bostan without following due process and without securing guarantees. The report has recommended that the matter should be investigated with a view to fix responsibility on the individuals at fault besides recovery of the amount.

The facts of this case are astonishing as in January 2000 the then management paid Rs. 1,508 million as advance for purchase of US$ to Malik Muhammad Boston a money changer. Out of which an amount of Rs.1,014 million was adjusted in five installments on supply of dollars. However, Rs. 493.673 million remained outstanding against him. The last serious attempt to recover the amount was carried out in March, 2012 when arbitration meetings were held. The issue since then has been thrown into cold storage.