Islamabad: The National Bank of Pakistan (NBP) is under intense scrutiny after an audit review revealed systemic financial mismanagement, including massive loan defaults, irregular appointments, unjustified salary enhancements, and questionable settlements. The Public Accounts Committee (PAC) reviewed audit paras totaling over Rs 452 billion, many of which involve failures to recover debts and blatant disregard for institutional policies.
A key issue raised was the non-recovery of Rs 190 billion in outstanding dues, with the Finance Secretary confirming that Rs 28.7 billion had been recovered so far. Committee Chairman Junaid Akbar Khan questioned why collateral was not secured when such large sums were disbursed. The President of NBP acknowledged that over 10,400 recovery cases remain pending.
In the Hascol Petroleum case alone, Rs 54 billion was lost, and despite FIA’s registration of 32 suspects in the FIR, substantial recovery has not occurred. PAC member Afnan Ullah Khan highlighted that Hascol, still operational with Rs 30 billion in assets, has not faced serious consequences. FIA’s credibility was further questioned when it was revealed that those responsible for the fraud were allegedly declared “innocent.”
NBP also granted Rs 15.2 billion in loans to sugar mills, most of which remain unrecovered. While one loan was fully adjusted and three were restructured, 17 are still pending. The PAC ordered recovery efforts and postponed further decisions.
Concerns about misuse of resources extended beyond financial dealings. Audit Para 8.2.4.47 exposed the appointment of litigation officers without the legally required LLB/LLM degrees. Despite receiving applications from better-qualified candidates at lower salary demands, management hired individuals lacking proper qualifications — a move deemed irregular and unjustified.
Another audit highlighted a foreign staffing violation. Mr. Qamar Hameed Khan, a German national previously serving as Deputy General Manager in NBP’s Frankfurt branch, was promoted to General Manager without competitive advertisement. His corporate grade was upgraded to Vice President, enabling access to financial powers and a 20% salary hike. These actions directly violated the Overseas Posting Policy and were seen as favoritism by the PAC, though management defended the move as being approved by the board based on performance.
Audit Para 8.2.4.49 revealed that NBP placed seven outsourced employees in NAB and FIA offices since 2012, covering their salaries — totaling over Rs 5.7 million — at the bank’s expense. Management cited a clause in the NAB Ordinance as justification, but the committee expressed concern over the bank’s weak internal controls and demanded a review of SOPs.
Perhaps most concerning were two massive loan settlements. NBP waived Rs 742.88 million for Ansari Sugar Mills despite a court decree in the bank’s favor. The management claimed to have recovered Rs 213.55 million as part of a decade-long settlement backed by pledged security. Another case involved Cast-N-Link Products Ltd., where NBP recovered only Rs 80 million against Rs 272.67 million in outstanding dues. Both settlements involved waivers of hundreds of millions in interest and unbooked markups.
Despite management claims that these settlements followed board-approved recovery policies and involved no principal write-offs, the PAC remains deeply concerned over the erosion of institutional integrity and accountability. While some audit paras were recommended for settlement following verification, the committee warned that such financial leniency and policy violations could not be tolerated in the future.
