ISLAMABAD: The Supreme Court has sought from the State Bank of Pakistan a list of people who got their huge loans waived during the last two years.
The direction was made by Chief Justice Iftikhar Muhammad Chaudhry on Tuesday while hearing a suo motu case regarding waiver of loans which caused losses of billions of rupees to the national exchequer.
The government should not worry even if diplomatic relations with other countries are affected in an attempt to get back national wealth, Justice Chaudhry remarked.
Senior Advocate Abdul Hafeez Pirzada informed the three-judge bench that according to a report submitted to a National Assembly committee and also endorsed by the finance minster, loans worth Rs56 billion have been waived during the last two years.
The State Bank attorney, Advocate Syed Iqbal Haider, informed the bench that during the period between 1971 and December 2009, Rs256billion worth of loans had been waived off. The board of director of the bank is authorised to waive a loan, he added.
“The Supreme Court will ensure the recovery of all loans written off illegally and test the policy on the touchstone of Article 25 of the Constitution, which states that ‘all citizens are equal before law and are entitled to equal protection of law,” Justice Chaudhry observed.
“What pleas were taken by these people while getting their loans waived,” the chief justice quizzed.
Different pleas were taken but the bank waived off irrecoverable loans, Haider replied. These circulars were issued under Section 33 (B) of the Banking Ordinance, he added.
But Pirzada submitted that in 2008, the Sindh High Court had declared the facility of waiver of loans “discriminatory”.
“Does Section 33 (B) of the Banking Ordinance give unchecked powers to the State Bank of Pakistan to waive off loans” Justice Tariq Pervez asked Advocate Haider.
“This concession was given only to the sick units for their recovery,” Haider replied. Only markup or service charges were waived off on some loans, he added.
The chief justice gave Advocate Haider until Wednesday to present the circulars, other relevant documents, and a list of the people who got their loans waived off. The hearing was adjourned till then.
Published in The Express Tribune, September 29th, 2010.