The Bank of Punjab (BoP) in compliance with the Supreme Court (SC) order has prepared a report revealing that the bank’s management has referred 83 cases of loan defaults to the State Bank of Pakistan (SBP) and the National Accountability Bureau (NAB).
As per procedures, a bank has to send a case of loan default to the central bank to forward it to NAB. In some instances banks have directly approached NAB for the recovery of defaulted amount.
BoP said it has sent 41 cases of defaults worth over Rs38.50 billion to NAB and 42 cases worth of Rs18.79 billion to SBP under section 31-D of National Accountability Ordinance (NAO) 1999.
The 83 cases are in addition to 66 loan default cases BoP has sent to the central bank for referral to NAB. Out of these SBP has so far forwarded 24 loan default cases involving Rs8.25 billion to NAB.
The corruption watchdog is reluctant to bite some big defaulters of BoP. The bank has sent reminders to NAB but it has yet to take action against a son-in-law of former governor of Punjab Khalid Maqbool and other influential loan defaulters, sources familiar with the matter told The Express Tribune.
In most cases the loan defaulters have acquired stay orders from the Lahore High Court, the BoP management stated in its report.
Due to these circumstances only 24 out of 66 cases have so far been referred to the NAB by the SBP, while the rest of the cases are still pending action.
The record shows that the directors of six companies of a leading textile group fraudulently and dishonestly caused loss worth of Rs7.320 billion to the bank. Though the central bank has referred the case to NAB for recovering the defaulted amount, the bureau is reluctant to initiate any legal action against the borrowers.
Similarly, the NAB was averse to initiating inquiry against another company for not paying back the Rs28 million loan.
In a letter addressed to the DG NAB Punjab, the BoP management also requested for initiating inquiry against ex-directors of the bank who had obtained loans worth Rs18.4 billion during their tenure.
In its report the Bop Management further stated that due to special attention of the Supreme Court, an amount of about Rs31 billion on account of non-performing loans have been recovered since 2009.
On Monday, a three-member bench of the Supreme Court headed by Chief Justice of Pakistan Justice Iftikhar Muhammad Chaudhry ,while hearing the Bank of Punjab loan scandal, had directed the BoP counsel to apprise the bench at the next hearing about the money recovered from defaulters and the actions that it took against defaulters. The hearing of case was adjourned till May 22.
Published in The Express Tribune, May 22nd, 2013.