Credit line: HBFCL, ZTBL's outstanding loans to be converted into equity
HBFCL to immediately pay its interest. Dar wants both HBFLC and ZTBL to reform, restructure under new management.
ISLAMABAD:
In a bid to settle the credit lines of House Building Finance Corporation (HBCL) and the Zarai Taraqiati Bank (ZTBL) due to dues owed to State Bank of Pakistan, it was decided to convert their loans into equity at par.
The decision was taken unanimously in a meeting between the stakeholders, House Building Finance Corporation (HBCL) and the Zarai Taraqiati Bank (ZTBL), and Finance Minister Ishaq Dar along with SBP at the Finance Ministry on Friday.
Dar was told that HBFCL owed SBP Rs13.2 billion since 2006 since it has not been able to do any business, nor has it been able to recover loans from defaulters. Any income from repayments is used to service the organisation’s wage bill.
On the other hand, ZTBL owes SBP a total of Rs93.2 billion. Of this, Rs54.5 billion is the principal amount and Rs38.7 billion is the mark up that the bank owes SBP. ZTBL’s credit line has not been cleared for the past 15 years.
Noting that both of these organisations play an important role in the economy and that the government wants to strengthen both of them.
The Finance Minister and all the three major stakeholders viz SBP, ZTBL and HBFC unanimously decided to convert their loans into equity at par and for immediate payment of interest by HBFC to SBP.
Emphasising new beginnings for the boards of HBFCL and ZTBL, he said that they should focus on aggressively marketing their products and that a task force should be formed for recovery of non-performing loans. New managements at the two organisations will be expected to strengthen their respective institutions and to reform and restructure them with the objective of making them vibrant financial institutions with robust balance sheets.
It was further decided that all legal, corporate and administrative requirements will be completed by July 21, 2014 subject to approval by the SBP Board of Directors in order to resolve the issue of 15 year old outstanding dues.
The meeting was also attended by Governor State Bank, Ashraf Wathra, Finance Secretary Dr Waqar Masood, Chairman SECP Tahir Mahmood, President ZTBL Talat Mehmood, MD HBFC Pervaiz Saeed, Advisor to the Finance Ministry Rana Assad Amin, Additional Finance Secretary to Finance Minister Shahid Mahmood and senior officials of the Finance Ministry.
In a bid to settle the credit lines of House Building Finance Corporation (HBCL) and the Zarai Taraqiati Bank (ZTBL) due to dues owed to State Bank of Pakistan, it was decided to convert their loans into equity at par.
The decision was taken unanimously in a meeting between the stakeholders, House Building Finance Corporation (HBCL) and the Zarai Taraqiati Bank (ZTBL), and Finance Minister Ishaq Dar along with SBP at the Finance Ministry on Friday.
Dar was told that HBFCL owed SBP Rs13.2 billion since 2006 since it has not been able to do any business, nor has it been able to recover loans from defaulters. Any income from repayments is used to service the organisation’s wage bill.
On the other hand, ZTBL owes SBP a total of Rs93.2 billion. Of this, Rs54.5 billion is the principal amount and Rs38.7 billion is the mark up that the bank owes SBP. ZTBL’s credit line has not been cleared for the past 15 years.
Noting that both of these organisations play an important role in the economy and that the government wants to strengthen both of them.
The Finance Minister and all the three major stakeholders viz SBP, ZTBL and HBFC unanimously decided to convert their loans into equity at par and for immediate payment of interest by HBFC to SBP.
Emphasising new beginnings for the boards of HBFCL and ZTBL, he said that they should focus on aggressively marketing their products and that a task force should be formed for recovery of non-performing loans. New managements at the two organisations will be expected to strengthen their respective institutions and to reform and restructure them with the objective of making them vibrant financial institutions with robust balance sheets.
It was further decided that all legal, corporate and administrative requirements will be completed by July 21, 2014 subject to approval by the SBP Board of Directors in order to resolve the issue of 15 year old outstanding dues.
The meeting was also attended by Governor State Bank, Ashraf Wathra, Finance Secretary Dr Waqar Masood, Chairman SECP Tahir Mahmood, President ZTBL Talat Mehmood, MD HBFC Pervaiz Saeed, Advisor to the Finance Ministry Rana Assad Amin, Additional Finance Secretary to Finance Minister Shahid Mahmood and senior officials of the Finance Ministry.