ISLAMABAD: The Supreme Court on Wednesday directed the State Bank of Pakistan to provide a list of at least 10 people for the period 1971-2009 who secured bank loans despite having their previous credits written off during the intervening years.
A three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhary, was hearing a suo motu case pertaining to the waiver of loans worth Rs256 billion.
Justice Chaudhry observed that people who had their loans waived looted the national exchequer and the money should be returned. He said legal proceedings should be initiated against bank officers who granted loans without securing proper collateral.
The chief justice remarked that while the elite flourished their businesses with the help of bank loans, the poor were pressed hard by the banks.
“The court will summon influential people who got their loans waived,” he said, adding that the SBP had failed to monitor activities of banks and it should accept responsibility.
SBP’s counsel Syed Iqbal Haider said that various countries had comprehensive policies regarding loan waivers.
The court questioned the central bank’s authority and jurisdiction to write off loans worth Rs256 billion between 1971 and 2009 under the Banking Companies Ordinance.
Iqbal Haider said they had submitted 49 volumes containing details, including all circulars for the period in review.
Answering a question posed by the court, the central bank’s counsel said loans had been waived under an amendment to the Banking Companies Ordinance in 1997 and the SBP Circular 29 of 2002.
Highlighting the fact that private and government banks operate under the same rules, the chief justice said: “This is a major case. We can even constitute a 17-member larger bench for its hearing. Rescheduling of loans has become a joke.”
Haider said the list of people who were granted loan waivers during the period 1971-2009 had been submitted to the court and the advocate-on-record had to correct the page numbering and put the documents in order.
Later, the chief justice ordered the central bank’s counsel to provide a list of at least 10 people from each year for the same period who obtained bank loans despite having previous loans written off and adjourned the case till October 20.
In the meantime, the government has sought more time for appointing a new chief of the National Accountability Bureau (NAB), a day ahead of the deadline.
“The federation has filed a petition in the Supreme Court to seek three more weeks for the appointment of a new NAB chairman,” Attorney-General Maulvi Anwarul Haq said when contacted by The Express Tribune.
Stressing the need for more time, he said time was needed to complete the consultation process with all stakeholders.
The government had put forward names of former Supreme Court chief justice Abdul Hameed Dogar, Justice (retd) Sardar Raza Khan, Justice (retd) Faqir Muhammad Khokhar, Mehmood Salim, a former secretary, and two former parliamentarians for the slot of NAB chief. However, opposition leader Chaudhry Nisar rejected all these names, insisting that a sitting judge should be appointed as the chairman.
Published in The Express Tribune, September 30th, 2010.