Pakistani banks have amounts worth more than Rs. 2 trillion in their accounts which belong to housewives and students.
According to the State Bank of Pakistan (SBP), the overall deposits maintained by all commercial banks in their accounts stand at Rs. 13 trillion. Deposits maintained of self-employed account holders record the highest share of Rs. 2.85 trillion in the banking industry. It is followed by the private sector (mostly companies) with a share of Rs. 2.79 trillion.
Interestingly, the segment of customers including housewives and students constitutes the third biggest share in the deposits of the overall banking sector of Pakistan.
The deposits of housewives and students are more than the deposits of the federal and provincial government, which kept Rs. 1.95 trillion in different banks. Even manufacturing and agriculture sectors had deposits of just Rs. 782 billion and Rs. 216 billion respectively in different banks, fairly lower than what housewives and students of the country.
The reality is these bank accounts are opened in the name of housewives and students by their husbands and parents, simply for the purpose of concealing their bank balance from tax authorities, claims a senior banker.
Housewives and students do not maintain these accounts for their genuine needs but accounts under this category are used to conceal the bank balance of the people to whom these account holders are financially dependent upon.
Businessmen, retailers, and wholesalers usually maintain these sort of accounts showing the ownership of their spouses and children, he added while requesting anonymity.
The practice of maintaining such accounts is common but new rules and regulations are strict which has slightly slowed down the rise of such accounts, he further said, though banks can’t technically regulate these accounts.
The documentation of these customers is different from regular customers at banks because opening such accounts requires additional and different documentation, including CNICs of husband or guardians and their pay-slip as a source of income, and declaration certificates.
However, there are genuine accounts too, mainly maintained by housewives to receive remittances from overseas. Similarly, students also receive amounts from their parents within the country or outside the country in their bank accounts. There are also saving products and features offered by various banks such as term-deposits certificates beside saving and current accounts.
Federal Board of Revenue (FBR) has made efforts to get unrestricted access to bank accounts but have not been provided access by banks which are bound to maintain the confidentiality of their customers as per secrecy law.
However, the revenue collection authority and intelligence department are provided access to individual accounts under special cases.
Recently, FBR’s Chief Shabbar Zaidi met with bank executives and asked to write letters to account holders having deposits of half million or more instructing them to whiten their assets under the recent amnesty scheme.
But the FBR’s demand was apparently turned down. Instead, it was allowed for FBR to examine the bank accounts of customers having deposits of Rs. 0.5 million as per law. In this scenario, hundreds of such accounts are likely to come under the radar of FBR without any proof of income. The customers can be penalized or they will be asked to pay tax in terms of a certain percentage.