The Supreme Court on Friday directed the State Bank of Pakistan (SBP) to submit on December 7 details of Rs52 billion loans waived off during the last two years.
A three-member bench of the apex court, headed by Chief Justice Iftikhar Muhammad Chaudhry, issued the order while hearing a suo motu case of 50 deadbeats, who had their loans worth Rs52 billion written off.
“Why does the Supreme Court always have to take action. Every institution should have a sense of responsibility,” Justice Chaudhry remarked during the course of the hearing. The counsel for the State Bank, Syed Iqbal Haider, presented a letter from the SBP governor in the court requesting that in this case the reasons of legally-written off loans and intentional default cases must be considered. He informed the bench that the new State Bank governor was serious in recovering the loans.
Addressing the counsel for REDCO Textiles, Salman Butt, Justice Chaudhry remarked that REDCO had borrowed billions of rupees from the banking sector. Neither was the money returned nor was anyone put behind bars.
Butt submitted that REDCO had borrowed Rs362 million and against this money, it has returned Rs465 million to different banks. But despite this, the banks are demanding Rs709 million after charging markup against which they filed a separate petition in the court.
“What the bank gives you is not charity, markup is agreed between the parties in the agreement” Justice Khalilur Ramday observed.
The country is facing serious crises and top 50 defaulters escaped from the country, Justice Chaudhry observed. “There is a new story behind every case,” he added.
He further observed that while not a single penny is waived in personal loans, state loans worth billions of rupees were written off. He warned Advocate Butt to return the loan the company got waived otherwise REDCO would be auctioned.
Justice Chaudhry observed that only eight out of top 50 defaulters have appeared before the court. “The State Bank wishes the Supreme Court to do its job, if the defaulters love their country then why don’t they return the money,” he remarked.
Later Abdul Hafeez Pirzada appearing in this case as amicus curiae submitted that the State Bank waived huge loans only to save the bankrupt industries. And now after flood it is doubtful that the bank may write off further loans.
The chief justice observed that concessions can be given in genuine cases but writing off loans on political basis must stop.
Later, the chief justice while adjourning the hearing till December 7, directed the State Bank to furnish the record of Rs52 billion loan waived off and ensure recovery of loans.
Published in The Express Tribune, October 30th, 2010.
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