No more: Cabinet decides to wind up sick bank

Industrial Development Bank hit by massive loan write-offs.

ISLAMABAD:

The cabinet has decided to start the process of winding up the Industrial Development Bank of Pakistan (IDBP) which became sick following heavy losses caused by massive write-off of loans.

The decision was taken in the wake of a report submitted by the State Bank of Pakistan (SBP) as convener of a committee formed to fix responsibility on people who caused losses to the bank from 1971 to 2009. The committee informed the cabinet about various reasons that resulted in bad loans and write-offs.

In 2003, it was decided that the bank would be restructured, but SBP recommended its liquidation. However, no decision has been taken so far.

Separately, a finance ministry official gave a detailed presentation to the cabinet on the Consumer Price Index (CPI) and movement of prices of essential commodities. Secretary finance said commodity prices had shown a nominal decline. Moreover, international prices of oil have become stagnant and are expected to decline in the near future which is likely to ease pressure on the economy.

Other issues that came under discussion included the start of negotiations between Pakistan and South Africa on forming a joint commission, mutual legal assistance in criminal matters between Afghanistan and Pakistan, visa abolition agreement between Pakistan and Jordan, transfer of offenders between Pakistan and Uzbekistan and promotion and protection of investment with Hungary.

Published in The Express Tribune, May 28^th, 2011.