PAC moves to investigate Rs26bn scandal at National Bank 

Heated debate at committee hearing as NBP refuses to be audited by AGP

ISLAMABAD: Amid a heated debate over the power of the Auditor General of Pakistan (AGP) to audit the National Bank of Pakistan (NBP), the Public Accounts Committee (PAC) of the Parliament has taken notice of the Rs26 billion scandal at the NBP and has ordered the Ministry of Finance (MoF) and the bank’s management to furnish relevant records.

At a committee meeting held with Rana Tanveer Hussain of Pakistan Muslim League-Nawaz (PML-N) in the chair, Public Accounts Committee discussed matters related to the audit of the Ministry of Overseas Pakistanis and NBP.

The committee chairman informed the members about the Rs26 billion controversial procurement contract awarded by NBP and the subsequent letter by Transparency International Pakistan (TIP) to the finance minister urging an investigation into the matter. 

Reprimanding the NBP Board of Directors Chairman Zubair Soomro, Tanveer inquired how the bank resorted to the court against the committee’s decision. 

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National Bank has freezed out the Public Accounts Committee from getting its accounts audited by the AGP since 2012 after the bank filed a case with the Sindh High Court. 

“This is an insult to the Parliament,” Tanveer said at the recent meeting of the committee. 

“The Auditor General of Pakistan (AGP) can conduct audits of each government institution,” the PAC chairman noted, also questioning whether the board of the bank was above the constitution.

The PAC chairman also warned that the committee could ask the government to dissolve the board of the National Bank. 

NBP Board of Directors Chairman Zubair Soomro informed the committee that the bank was not obligated to get its audit done by AGP. “The government does not provide funds to NBP and under the 18th amendment, only the departments which are funded by the government are bound to get an audit of their accounts from AGP,” he added. 

The Ministry of Finance (MoF) on this occasion supported the PAC point of view that the constitution and laws were very clear that gave the AGP the power to conduct audits of each government department.   

Noor Alam Khan, the member of the committee, said that the PM should be apprised of the situation as departments including Supreme Court and Law Ministry were in favour of an audit, therefore, the NBP could not refuse.

Riaz Fatyana, another member of the committee, said that if the bank’s board does not accept the plea, then the finance ministry should dissolve the board. 

Committee member Syed Mushahid Hussain further asked the NBP management to withdraw its case from the Sindh High Court (SHC).

PAC chairman on the occasion directed the Finance Ministry to write a letter to the National Bank to withdraw the petition filed in the court against the decision of the committee, or else the committee would take action under criminal code. 

The chair also sought reports from NBP pertaining to audits that were done from the private chartered accountant firms.

The scandal and TIP’s letter to Finance Minister Tarin

On May 19, Transparent International Pakistan requested Finance Minister Shaukat Tarin to examine the allegations against NBP in a case pertaining to the violation of PPRA rules. 

In its letter, the TIP highlighted the alleged violation of PPRA Rules, 2004 in awarding a contract worth approximately Rs26 billion for scanning and indexing of documents to a single bidder. 

According to documents seen by Profit, the NBP invited tenders for Document Management System (DMS) in August 2018, which received eight bids on November 17 whereas bids were opened on the same day. The bank then posted the evaluation report on PPRA’s website after a lapse of 19 months, on June 15, 2020.

Three out of eight bidders did not submit bids while four were disqualified with the justification that they did not conform to the specified requirements, after which a single bid of M/s A.S C. First Solution Pvt. Ltd. was declared as the lowest evaluated bidder. 

The bidder quoted Rs0.95 for scanning, Rs2.I5 for indexing; Rs115 to cover the cost of a box with the seal, Rs30 cost of transferring to the warehouse; Rs19.50 per box as storage rental, and Rs75 for retrieval.

The total cost of the contract has not been declared but is estimated at around Rs26 billion for all 1,450 branches of NBP based on medium-sized branches generating over 100,000 documents including cheques in a five-year period.

TIP has alleged that prima facie, NBP, has violated the PPRA rules 26, 35 and 47 and awarded a contract to a single bidder, adding that undeclared total evaluated cost in the evaluation report is proof of collusion under PPRA Rule 2(f) is dubious. The civil society organisation has said that the contract must be canceled if the bank is found guilty. 

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