State Bank of Pakistan refuses to open Afghanistan Relief Fund

Citing government sources, The Express Tribune reported that the central bank has returned the government’s request to open the relief fund and advised that the decision might be reviewed in light of Pakistan’s commitments under international covenants and the FATF action plan.

The Pakistan Tehreek-e-Insaf (PTI)-led government had decided to open the bank account to receive cash donations from Pakistan and abroad to help Afghan citizens meet their immediate humanitarian needs.

On December 8, the Finance Ministry had issued instructions to the SBP to “open with immediate effect” the Afghanistan Relief Fund to provide humanitarian assistance to Afghanistan.

The federal government had requested the SBP Governor that he should issue necessary instructions to the scheduled banks to open such accounts.

Pakistan remains on the FATF grey list for deficiencies in its counter-terror financing and anti-money laundering regimes since June 2018.

According to the latest FATF order, Islamabad did not meet the “strategically important” condition about nominating entities and individuals, who should be put on the UN list of terror outfits and persons.

At the request of the SBP, the issue of opening the Afghanistan Relief Fund is being examined to ensure that Pakistan fully complied with its international commitments, Finance Secretary Hamid Yaqoob Sheikh told The Express Tribune.

The central bank’s observations have raised questions over the authority of the federal government, the report said, adding, it may also throw a challenge to the Foreign Office that is trying to secure commitments from the international community to avoid catastrophe in Afghanistan.

Afghanistan’s banking system continues to remain crippled after the Taliban’s takeover of Kabul in August last year.