The Auditor General of Pakistan has uncovered financial irregularities exceeding Rs243 billion in the State Bank of Pakistan (SBP), pointing to large-scale mismanagement, embezzlement, and defaults during the 2022-23 audit.
The report raised serious questions over SBP’s performance as a regulator, stating the central bank failed multiple times to safeguard the national exchequer and the interests of consumers.
According to the audit, loans worth Rs59 billion issued by state-owned banks went into default, with no satisfactory punitive or regulatory action taken against those responsible.
The printing of Rs75 commemorative currency notes on Independence Day and SBP’s anniversary caused a loss of Rs1.96 billion.
A total of 72 million notes worth Rs9.15 billion were printed, but the notes received little public acceptance as the bank had not assessed public response before large-scale printing.
The report also flagged the appointment of a dual national as Deputy Governor of the State Bank, terming it against rules. An Australian national was appointed to the position, receiving an annual salary of Rs120 million in violation of regulations.
Further irregularities included the sale of securities below purchase price, causing a Rs105 billion loss, while keeping large funds with international managers resulted in a Rs26 billion loss instead of profit.
The audit found the SBP failed to provide meaningful relief to genuine borrowers through local institutions, as small borrowers were charged a high 13 percent interest rate, leading to a Rs12 billion loss.
Other violations included a Rs5 billion irregular loan to a private bank, unauthorized financing facilities worth Rs2.59 billion to various institutions, and Rs3.81 billion in housing loans to SBP employees without clearing previous accounts.
The report also revealed embezzlement of Rs63.5 million in medical stock by SBP officers, with no inquiry initiated even after 16 months. Additionally, eight senior officers at the SBP Lahore office were found to have dubious, unverified educational degrees.
