GOVERNOR State Bank of Pakistan (SBP) Jameel Ahmad Friday informed the Senate Standing Committee that the inquiry against manipulation of currency with the alleged involvement of banks for earning lofty profits would be completed by the end of the ongoing month.
Minister of State for Finance Aisha Ghaus Pasha asked the SBP for imposing the maximum penalties against those commercial banks found involved in minting billions of rupees in order to place “effective deterrence”.
Pakistan went through a very difficult phase recently when the prospects for a default were imminent.
It was the collective responsibility of all institutions and the stakeholders to extend a helping hand to avert such a possibility and also to avoid negative consequences of the situation for the common man.
However, people witnessed a free for all behaviour by some institutions including banks and financial institutions, which took full advantage of the weak enforcement mechanism in the backdrop of political instability to earn undue profits at the cost of national economy and sufferings of the people.
Currency stabilization became a major issue mainly because of manipulation by vested interests and the phenomenon continues because of the inability of the Government and the State Bank to move against speculators and manipulators.
No doubt, the SBP took administrative measures to control outflow of dollars like imposing limits of $30,000 payment through credit cards but permission given for legal export of foreign currency and flexible attitude towards violating banks compounded the situation further.
Reports about involvement of banks in undue rupee devaluation appeared several weeks back but the Government and the State Bank are taking too much time in probing the matter and taking regulatory action against them.
Remarks of the SBP Governor suggest there was indeed wrongdoing on the part of some banks and a prompt and strict action is warranted.
