Supreme Court calls for loan write-off records

ISLAMABAD: The Supreme Court of Pakistan has asked the State Bank of Pakistan to submit the record of those who got their bank loans written-off from 1971 to date. The banking sector regulator is to submit the records in court on August 2.

The three-member bench headed by Chief Justice Iftikhar Chaudhry was hearing the case regarding the waiving of bank loans worth billions of rupees. The court had taken suo moto notice of a news item in a local daily about banking loan irregularities worth Rs54 billion. However, the SBP report presented to the court showed the sum to be in the vicinity of Rs256 billion.

The counsel for various banks, Salman Raja, told the court that bank loans worth an estimated Rs37 billion were waived between 1971 and 1996 and that another Rs68.7 billion in loans were written off between 1997 and 2009.

Raja also said that the aggregate amount of loans taken between 1971 and 2009 was Rs256 billion and the markup on these came to Rs99 billion. He complained to the court that despite several reminders, the SBP failed to provide details of these loans.

To this, Justice Khalilur Rehman Ramday said that depositors had been reduced to begging at street corners while those who had gotten their loans written off had attained “top offices”. Ramday also urged Punjab advocate general Khwaja Harris to step forward in the greater  public interest and to take on these cases on a pro bono basis. Meanwhile, the chief justice threatened to jail anybody who did not return ‘national wealth’.

Adjourning the case till August 2, Chaudhry directed the State Bank to submit the details of loans written-off between 1971 and 2009 at the next hearing.

Published in The Express Tribune, June 19^th, 2010.