The Auditor General of Pakistan has uncovered financial irregularities amounting to over Rs243 billion at the State Bank of Pakistan (SBP) during its 2022-23 audit. The report highlights extensive mismanagement, embezzlement, and loan defaults.
The audit raised serious questions about the SBP’s performance as a regulator, noting that the central bank repeatedly failed to protect the national treasury and the interests of consumers.
According to the report, state-owned banks issued loans worth Rs59 billion that later defaulted, with no satisfactory punitive or regulatory action taken against those responsible. The printing of commemorative Rs75 currency notes for Independence Day and the SBP’s anniversary resulted in a loss of Rs1.96 billion. A total of 72 million notes, valued at Rs9.15 billion, were printed, but they received little public acceptance because the bank had not assessed public demand before the large-scale printing.
The report also flagged the appointment of a dual national as Deputy Governor of the State Bank, calling it a violation of regulations. An Australian national was appointed to the position, receiving an annual salary of Rs120 million, which was against established rules.
Further irregularities included the sale of securities below their purchase price, causing a Rs105 billion loss, while keeping large funds with international managers led to a loss of Rs26 billion instead of generating a profit. The audit also found that 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 an irregular loan of Rs5 billion to a private bank, unauthorized financing facilities worth Rs2.59 billion to various institutions, and housing loans of Rs3.81 billion to SBP employees without clearing their previous accounts. The report also revealed the 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.
