Senate Standing Committee has passed a bill to penalized bank officers who refused to open a bank account for politicians and other PEP(politically Exposed Persons).
In the current banking practice, it’s very hard for politicians and any other powerful person holding a public office to open a bank account in any commercial bank in Pakistan and to get a credit card or to use any banking product or service.
It’s because of the nature of their profession which falls under the high-risk category.
Banks demand heavy documentation and take a lot of time to process bank accounts of Politically Exposed Persons. Banks usually give a hard time to politicians for opening bank accounts who are lawmakers in the assembly and it’s in their hands to amend such bill.
As per the new amendment in Banking Companies Bill 2021, the bank officers who refuse to open a bank account for a Politically Exposed Person or provide them any banking services like credit cards, lockers, or any other banking service will have to face a penalty of Rs.1000,000 and imprisonment in the jail for one year.
The New Banking Companies amendment bill 2021 will come into force after approval from the Senate and the National assembly.
Senator Saleem Mandviwalla told the media that passing a banking amendment bill to stop discrimination against politically exposed people has become very necessary because such people holding public office face a lot of difficulty in availing of banking services.
The meeting was held in the presence of Senators Shehzad Waseem, Sherry Rehman, Saadia Abbasi, Saleem Mandviwalla, Musadik Malik, Kamil Ali Agha, Zeeshan Khanzada, Faisal Saleem Rehman, Haji Hidayat Ullah and senior officers from the Ministry of Finance, Ministry of Economic Affairs, Federal Board of Revenue, State Bank of Pakistan and Securities & Exchange Commission of Pakistan.
The officers from the state bank, ministry of finance and ministry of law and justice opposed the ruling of the bill with an argument that no such amendment must be passed without the consent of the prevailing Govt.
The committee chairman Senator Talha Mehmood proposed this stance and the amendment bill was passed with a majority.
The proposed amendment in section 83 of the Banking Companies Ordinance (BCO) 1962 advises to put a new subsection 1E, that reads:
“If an officer of the banking company or a scheduled bank, as the case may be on the basis of creed, religion, gender, ethnicity, madrassah or Islamic educational institute, class or group of citizens like politicians, government servants or teachers of the madressah, refuses to open an account, issuance of letter of credit, bank guarantee or any other financial facility only on the ground of politically exposed person, issues red alert or high-risk alert for business trade, without any sufficient restriction under any law, shall be punished with simple imprisonment for a term which may extend to one year, or with fine which may extend to one hundred thousand, or with both.”
Find more detail in Dawn Newspaper on this topic