SBP list submitted in court includes Nawaz period

Wednesday, 23 December 2009 17:57

ISLAMABAD: The Supreme Court on Tuesday gave a final warning to those who have managed to get their loans written off from financial institutions during the last 38 years and directed the State Bank to furnish a list of loan defaulters right from 1971 to date. Only one chance will be given to defaulters to return the loans and strict action will be taken against them without any discrimination, Chief Justice Iftikhar Muhammad Chaudhry observed while heading a three-member bench of the apex court hearing a suo moto case of Rs 54 billion written-off loans. If anyone said that the court has crossed its limits we are ready to take the blame in the best interest of the nation, the chief justice remarked, adding the court would look into the State Bank Circular 29 regarding writing off loans under Article 25 of the Constitution. The chief justice further observed that on the one hand the country was facing uncertainty, taking foreign loans to run the affairs of the state, while, on the other, huge loans of influential people are being written off. The court directed the State Bank governor to furnish a list along with other financial institutions regarding written-off loans right from 1971 to date. The court directed the State Bank to ask the financial institutions in all the four provinces to prepare a list of loan defaulters right from 1971 to date and it should be placed on the record. It adjourned the hearing till February 2. The State Bank submitted the list of the individuals and organisations that had got Rs193 billion bank loans written off during the period 1997 to 2009.The Bank report said that there was Rs 78 billion as principal amount in the written-off loans of 170 billion.

The overall amount also included Rs 31 billion mark-up and Rs 92 billion losses and other financial expenses. Syed Iqbal Haider, the counsel for the State Bank of Pakistan (SBP), appeared before the court and submitted that Circular 29, which was issued on October 10, 2002 under a lawful authority under section 33-B of the Banking Companies Ordinance, had provided incentives to the big debts recovery.Abdul Hafeez Pirzada, who was earlier appointed as amicus curiae by the court in the case and later made a party for being the chairman of a private entity being a beneficiary of loan write-off, also appeared before the court. He submitted that the act of write-off is being exercised by the bankers in favour of those who have no respect for law and they never returned the loan. The Supreme Court had taken a suo moto notice on a news report appearing in The News on October 23, 2007, about the huge Rs 54 billion loans write-off. Quoting an official secret report, The News report had revealed that the previous government, in its five-year term, had written off Rs 53.499 billion bank loans granted to big shots of Pakistan on the basis of a decision taken by the financial team of President Pervez Musharraf in December 2002. According to the report, the disclosure was made in a secret report submitted before the Public Accounts Committee (PAC) of the National Assembly, which had been requested to take up the issue at the earliest to know the reasons behind such a massive loss to the public exchequer, facilitating the privileged.

Courtesy : The News