SC orders banks to issue notices to loan beneficiaries

[Lahore_Real_Estate]

* State Bank submits list of top 50 borrowers who got their loans written off

* Court asks SBP to justify its circulars or recover waived off loans

ISLAMABAD: The Supreme Court on Wednesday directed the counsel of the State Bank of Pakistan, Syed Iqbal Haider, to ask all banks to issue notices to the major borrowers who availed the opportunity of getting their loans written-off.

A three-member Supreme Court bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Ghulam Rabbani and Justice Khalilur Rehman Ramday was hearing a suo motu case regarding waiving off over Rs 256 billion bank loans during from 1971 to 2009 under the Banking Companies Ordinance.

The SBP submitted in the Supreme Court a list of top 50 individuals and companies whose loans worth Rs 69.35 billion had been written off by the banks in the last two years.

Iqbal Haider told the court that he had filed details of top 50 write-offs of the banking sector besides a list of loans written offs under BPD-29. According to details, the total written-off amount in the first category was around Rs 47.109 billion, while in the second list, the amount was Rs 15.556 billion.

During the hearing, the CJP observed that all the loans could be returned if the SBP wanted to. He said the people’s money would not be allowed to go to waste, adding that if the guardians of the nation turned into looters, then the people defiantly had the right to hold them accountable.

Haider contended by saying, “If we do that, there will be serious repercussions and the whole economy would collapse.”

Justify or recover: To a question by Justice Khalilur Rehman Ramday, Haider replied that he had not discussed the matter with the newly appointed SBP governor. Justice Ramday told him that he should have held discussion with the new governor, as being a new authority he would have certain news things in mind. The CJP told the counsel that they should defend their stance on the basis of their circulars or recover the amount.

Appearing as amicus curiae, senior lawyer Abdul Hafeez Pirzada said there were about 38 banks functioning across the country, but under the circulars, they had not been given the benefits, as even Circular 13 was contrary to Circular 29. He said the total written off amount now estimated to over Rs 300 billion as Rs 50 billion had been waived off during the last one year alone. He said the banks were making huge profits, on one hand, while on the other the beneficiaries were running their industries on these loans.

He said the statement of the Federal Board of Revenue chairman was on record, which stated that banks avoided paying taxes by writing off these huge loans. The court asked him to tell the beneficiaries through fax notices that their names had been submitted to the court and they would now have to defend themselves. Later the court adjourned further hearing until today (Thursday).