Jameel Ahmad, the governor of the State Bank of Pakistan (SBP), briefed the National Assembly’s Standing Committee on Finance and Revenue that inquiries had been made into the involvement of banks in exchange rate manipulation.
According to Ahmad, the first part of the investigation focused on Bank Al Habib, Habib Bank Limited, National Bank of Pakistan (NBP), Meezan Bank Limited, United Bank Limited (UBL), Allied Bank Limited (ABL), and Standard Chartered. He omitted to mention the eighth bank, though.
He told the tribunal that ABL, NBP, and Standard Chartered had each received show-cause warnings.
He continued by saying that in the following stage, the other banks will be looked into.
The committee’s chairman, MNA Qaiser Ahmad Sheikh, gave SBP instructions to take the proper action against all banks and exchange firms implicated in the manipulation of the currency rate during today’s meeting.
According to a news release from the National Assembly Secretariat, he requested that the central bank assess the severity of the violations by both parties and take the necessary action to ensure that nobody “has the audacity to play with the economy of the country.”
The committee believed that the banks made enormous gains during the recent volatility in the exchange rate and the differential between the interbank rate and the rate provided by exchange providers.
Ahmad has told the committee that after the investigation is complete, anyone who violated the rules will be punished.
Members of the Committee, the Secretary of Finance, the Chairman of the FBR, the Governor of the State Bank, and other senior executives from the relevant agencies attended the meeting of the Committee.
An earlier report said that banks had increased their purchases of US money by twofold and were using credit cards to move it abroad as the authorities struggled to stop the flow of dollars.
According to analysts in the foreign exchange market, the SBP and the government had strict restrictions on buying dollars on the open market, but the banks were giving people a way out through credit cards.
In a media interview the next week, Finance Minister Ishaq Dar declared that manipulating the exchange rate would not be permitted.
He said that he was aware that certain speculators were playing this game and advised them to quit right away, saying, “This is not the right place where the rupee stands at the moment.”