The recent meeting of the Public Accounts Committee has once again exposed deep-rooted flaws in Pakistan’s financial governance and institutional oversight. With over Rs15.2 billion in unpaid loans extended by the National Bank of Pakistan (NBP) to sugar mills, the meeting highlighted how public money is continuously siphoned off without consequences. Most of the loans remain stuck in judicial or recovery phases, while the bank struggles to retrieve even a fraction of the amount. Out of 25 sugar mills that received loans, only one has fully repaid its dues, three have managed to restructure, and the remaining are all facing recovery proceedings. This paints a troubling picture of how the state’s banking apparatus is unable—or perhaps unwilling—to act against financially powerful industrial players.
National Bank officials informed the committee that 10,400 loan recovery cases are pending, signaling a breakdown in institutional efficiency. Even more concerning is the admission by the bank’s president that while loans are issued against pledged assets, recovery still remains dismal. This raises serious concerns about the credibility of the pledged assets, their valuation, and whether internal collusion or undue influence helped close cases without actual repayment. If recoveries are not happening despite collateral, the system is either riddled with loopholes or manipulated to favor select entities.
Further complicating matters is the glaring evidence of elite privilege and misappropriation of resources within the bank’s own leadership. It was disclosed during the meeting that the Board of Directors had increased their dinner allowance from Rs. 1.5 lakh to Rs. 4 lakh, a decision made without any oversight or approval from the Finance Ministry. A representative from the ministry confirmed that such decisions require formal approval, yet the board proceeded to unilaterally authorize this increase. This shows how deeply embedded a culture of entitlement and impunity is, even within regulatory institutions.
The committee’s discussion made it clear that this is not simply a case of financial mismanagement—it is a reflection of broader institutional decay. The sugar mill owners implicated in these defaults are not ordinary borrowers; they belong to a powerful industrial elite that has long benefited from state subsidies, tax rebates, and political access. Their ability to default on loans without fear of consequence speaks volumes about the lack of accountability in the system. At the same time, the internal management of the National Bank appears more focused on self-enrichment than on safeguarding the public’s assets.
The meeting concluded with several urgent recommendations, including the need for a forensic audit of all loans issued to sugar mills, disciplinary action against responsible bank officials, and a review of the board’s excessive privileges. Furthermore, it was proposed that a representative from the Finance Ministry should be present at every board meeting to ensure proper oversight and monitoring. These measures, if implemented, could serve as a first step toward restoring public trust.
This is not just a technical lapse or an accounting error; it is a clear case of systemic looting of public money. If decisive action is not taken now, the abuse of financial institutions will continue unchecked and become further entrenched as an accepted norm.
