NBP and its slow progress on implementing PM’s orders
Thousands await response to application seeking loan, about 5,000 rejected despite meeting stringent criteria
Thousands await response to application seeking loan, about 5,000 rejected despite meeting stringent criteria. PHOTO: FILE
ISLAMABAD:
The National Bank of Pakistan (NBP) has flouted Prime Minister Nawaz Sharif’s orders by not clearing the backlog of ‘PM Youth Business Loan Scheme’ as four out of every 10 approved cases await disbursement and new applicants are being discouraged.
The high ratio of pendency and extremely slow place of processing new applications has raised serious questions over the NBP management’s commitment to the PM’s flagship Youth Loan Scheme, revealed NBP’s official documents and discussions with officials working on the scheme.
For instance, Mohammad Saeed Ahmad, 37, is waiting for a response to his request for a Rs2-million loan since November 17. The rules require NBP to respond to the applicant within 15 days. Ahmad is not alone; thousands of applicants await a response while about 5,000 people have been rejected despite meeting stringent criteria.
The people working on the scheme in PM’s Office, NBP headquarter and regions said the top management had given verbal orders to slow down the implementation.
To review the progress on his flagship programme, the premier called the officials of NBP, State Bank of Pakistan (SBP) and the Ministry of Finance this week. The results disappointed the premier, said an official who attended the meeting.
On September 17, 2015, the premier directed NBP President Iqbal Ashraf to clear the entire backlog in two months. However, even after five months, out of 12,229 approved cases, as many as 4,992 or 40.8% cases are still pending for disbursements, according to the NBP presentation given to the premier.
The situation is so alarming that 1,174 or 23% of the total winners in the first ballot of February 2014, 839 winners of June 2014’s ballot and 2,979 post-June 2014 period winners are awaiting loans despite their cases being cleared for disbursements.
“The current situation is dismal and the NBP is not meeting targets,” said the PM flagship programme Public Relations Officer who also confirmed that there were complaints about NBP officials discouraging the applicants.
The NBP president gave hope that the situation would turn around in the next ten months (by the end of this calendar year) and the bank would disburse loans among 13,500 new applicants,” added the official.
“The target is unrealistic, given the fact the NBP is not whole-heartedly implementing the scheme,” added another NBP official working on the programme.
Reality
The government had announced the provision of loans ranging from Rs500,000 to Rs2 million, requiring funds worth Rs50- 200 billion aimed at providing jobs to the youth.
Corporate results: NBP posts Rs20b profit for 2015
“I have been desperately knocking the doors of concerned NBP officers but so far I have not gotten a reply,” said Ahmad awaiting response since November.
A source in NBP told The Express Tribune that the management had directed the lower staff to log in the request and keep it pending.
Results
As of February 17, the NBP could disburse Rs6.78 billion among 7,241 beneficiaries. In 2015, the NBP disbursed just Rs588 million among 557 beneficiaries, showed the bank documents.
In 2014, when the PM announced the scheme about 50,049 people applied - a figure that drastically came down to just 755 applicants by the end of December, showed the presentation given to the premier. Total applicants remain so far at 65,000 and 11% of them actually got money.
Whatever was distributed so far, three-fourths of it went to people belonging to Punjab. K-P’s domicile applicants got 12%, Sindh 7%, Islamabad 2%, Azad Kashmir 2%, Balochistan 2% and Gilgit Baltistan residents got 1% of the so far disbursed loans, according to the NBP documents.
NBP views
When contacted, an official of the NBP blamed the design of the programme as a hurdle. “This has also been conveyed to PM in the last meeting,” he said.
The management also complained that there were no clear instructions from SBP on the disbursements of the entire loan in a single tranche.
The NBP is also demanding the federal government to increase its share in credit loss from 5% to 55%. The federal government, however, is not ready to do that.
The official spokesperson was not available for comments.
Published in The Express Tribune, February 27th, 2016.
The National Bank of Pakistan (NBP) has flouted Prime Minister Nawaz Sharif’s orders by not clearing the backlog of ‘PM Youth Business Loan Scheme’ as four out of every 10 approved cases await disbursement and new applicants are being discouraged.
The high ratio of pendency and extremely slow place of processing new applications has raised serious questions over the NBP management’s commitment to the PM’s flagship Youth Loan Scheme, revealed NBP’s official documents and discussions with officials working on the scheme.
For instance, Mohammad Saeed Ahmad, 37, is waiting for a response to his request for a Rs2-million loan since November 17. The rules require NBP to respond to the applicant within 15 days. Ahmad is not alone; thousands of applicants await a response while about 5,000 people have been rejected despite meeting stringent criteria.
The people working on the scheme in PM’s Office, NBP headquarter and regions said the top management had given verbal orders to slow down the implementation.
To review the progress on his flagship programme, the premier called the officials of NBP, State Bank of Pakistan (SBP) and the Ministry of Finance this week. The results disappointed the premier, said an official who attended the meeting.
On September 17, 2015, the premier directed NBP President Iqbal Ashraf to clear the entire backlog in two months. However, even after five months, out of 12,229 approved cases, as many as 4,992 or 40.8% cases are still pending for disbursements, according to the NBP presentation given to the premier.
The situation is so alarming that 1,174 or 23% of the total winners in the first ballot of February 2014, 839 winners of June 2014’s ballot and 2,979 post-June 2014 period winners are awaiting loans despite their cases being cleared for disbursements.
“The current situation is dismal and the NBP is not meeting targets,” said the PM flagship programme Public Relations Officer who also confirmed that there were complaints about NBP officials discouraging the applicants.
The NBP president gave hope that the situation would turn around in the next ten months (by the end of this calendar year) and the bank would disburse loans among 13,500 new applicants,” added the official.
“The target is unrealistic, given the fact the NBP is not whole-heartedly implementing the scheme,” added another NBP official working on the programme.
Reality
The government had announced the provision of loans ranging from Rs500,000 to Rs2 million, requiring funds worth Rs50- 200 billion aimed at providing jobs to the youth.
Corporate results: NBP posts Rs20b profit for 2015
“I have been desperately knocking the doors of concerned NBP officers but so far I have not gotten a reply,” said Ahmad awaiting response since November.
A source in NBP told The Express Tribune that the management had directed the lower staff to log in the request and keep it pending.
Results
As of February 17, the NBP could disburse Rs6.78 billion among 7,241 beneficiaries. In 2015, the NBP disbursed just Rs588 million among 557 beneficiaries, showed the bank documents.
In 2014, when the PM announced the scheme about 50,049 people applied - a figure that drastically came down to just 755 applicants by the end of December, showed the presentation given to the premier. Total applicants remain so far at 65,000 and 11% of them actually got money.
Whatever was distributed so far, three-fourths of it went to people belonging to Punjab. K-P’s domicile applicants got 12%, Sindh 7%, Islamabad 2%, Azad Kashmir 2%, Balochistan 2% and Gilgit Baltistan residents got 1% of the so far disbursed loans, according to the NBP documents.
NBP views
When contacted, an official of the NBP blamed the design of the programme as a hurdle. “This has also been conveyed to PM in the last meeting,” he said.
The management also complained that there were no clear instructions from SBP on the disbursements of the entire loan in a single tranche.
The NBP is also demanding the federal government to increase its share in credit loss from 5% to 55%. The federal government, however, is not ready to do that.
The official spokesperson was not available for comments.
Published in The Express Tribune, February 27th, 2016.