SBP asks banks to submit loan write-off record

Directive comes in the wake of orders from Supreme Court.

KARACHI:

The State Bank of Pakistan (SBP) has directed all banks and development finance institutions (DFIs) to immediately submit the entire record of all written-off, remitted, reversed and waived loans and advances of Rs2.5 million and above for the period 1971 to 1991, and Rs25 million and above from 1992 onwards, to the commission constituted by the Supreme Court of Pakistan.

The State Bank has issued the directives on the advice of the Supreme Court, which is hearing a suo motu case in connection with Rs256 billion worth of loan write-offs in the last 40 years.

The commission was formed for examination and consideration as to whether the loan write-offs were allowed without validity and justification, or because of political reasons or considerations other than law or bona fide business considerations.

The SBP, in a circular issued on Friday, also directed banks and DFIs to ensure compliance with the instructions and provide assistance and cooperation in the work of the commission as well as comply with the instructions of the commission.

Published in The Express Tribune, June 4^th, 2011.