Banking lobby overpowers finance ministry

For over three months, the Ministry of Finance has been sitting on the central bank’s inspection report against commercial banks in a foreign currency manipulation case, delaying action against them despite clear incidences of charging ‘higher spreads.’ The action against at least eight commercial banks has been put on hold despite Finance Minister Ishaq Dar’s repeated vows to impose heavy taxes on the commercial banks for reportedly making exorbitant profits, taking Rs25 billion to Rs50 billion, by playing with the value of the rupee against the US dollar. “The SBP has conducted a limited scope inspection of the matter and furnished its report to the Finance Division on December 27, 2022,” the central bank informed the Senate Standing Committee on Finance on Wednesday. The date of submission of the report underscores that the federal government and central bank were deliberately delaying action against the banks. The federal government had an opportunity last month to slap additional taxes, through a mini-budget that it has been claiming to impose, in lieu of fines.