Supreme Court on Wednesday directed representatives of banks in a loan write-off case to draft guidelines for a commission looking into Rs256 billion in loans that have been written off in the last 40 years. These guidelines must be acceptable to the State Bank of Pakistan (SBP).
Earlier, the SBP had informed the court that it was ready to issue a new circular in order to formalise the scope of the three-member commission’s proceedings. Syed Iqbal Haider, counsel for the SBP, apprised the bench that SBP Governor Shahid Kardar had given his consent for the issuance of the new circular.
A three-member bench of the apex court was hearing a suo motu notice of 2007 that loans of Rs53.499 billion were written off by the Musharraf government from 2002 to 2007.
Justice Chaudhry observed that tax evaders in several business sectors had been identified but loans were still being extended to them just through phone calls. “Our objective is to bring the money back, strengthen the economy and deal with those responsible in accordance with the law,” he said.
The chief justice noted that the SBP was relying upon Circular 29 which had been instrumental in allowing loans to be waived off illegally. Iqbal Haider informed the bench that the SBP had recovered Rs600 million under Section 13 of the Banking Companies Ordinance 1962 and explained that the concessions were granted to sick units lacking working capital.
The court postponed the hearing till Thursday and observed that if the parties agreed to a draft, the bench could dispose of the matter.
Published in The Express Tribune, June 2nd, 2011.
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