Post Reply 
 
Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Ministry of Finance lashes out at Industrial Development Bank for loan write-offs
08-22-2009, 06:13 AM
Post: #1
Ministry of Finance lashes out at Industrial Development Bank for loan write-offs
Bank needs cash injection of Rs3.2bn

Saturday, August 22, 2009
By Aftab Maken

ISLAMABAD: The Ministry of Finance has slammed executives of the Industrial Development Bank of Pakistan (IDBP) for imprudent lending and major write-offs in the last five years and constituted a committee of professionals for scrutinising the written-off loans.

A meeting on corporatisation and restructuring of IDBP, with Finance Minister Shaukat Tarin in the chair, authorised the expert committee to conduct a thorough examination of the lending process, disbursements and write-offs, revealed the minutes of the meeting.

The officials directed the committee comprising representatives of law and justice, State Bank, an independent banker and an independent auditor to fix the responsibility for initiating appropriate action against responsible persons for not following SBP’s rules while writing-off loans, the minutes showed.

The meeting also agreed that the State Bank would manage the direction of the bank after its conversion to Industrial Development Bank Ltd (IDBL).

Shaukat Tarin asked the Bank’s managing director about the negative net worth of the bank, expected recovery of non-performing loans (NPLs) and major liabilities.

Replying to the queries, the IDBP managing director said major write-offs in the last five years pertained to the cases transferred to the Corporate and Industrial Restructuring Corporation (CIRC) or settled under the SBP’s scheme BPD-29.

The Forced Sale Value (FSV) in respect of collateralised assets was Rs668 million as of June 30, 2009, he said, adding if investments in Federal Investment Bonds/shares and fixed assets were also considered, a total amount of Rs2 billion might be obtained.

The MD further explained that the current negative net worth of the bank was Rs28.17 billion (up to June 30, 2009) while total deposits were Rs3.836 billion. Outstanding liabilities in respect of the government and the SBP amounted to Rs24.921 billion, the minutes quoted the MD as saying.

With all these outstanding liabilities and deposits, the meeting was told that a cash injection of Rs3.249 billion was required to bring its equity to the level of zero. The meeting was told that all formalities for the conversion of IDBP into IDBL had been completed as per decision of the cabinet except the issuance of vesting order.

Regarding the gap in net worth of the bank, the SBP governor said it might be bridged by converting the liabilities of the government and the SBP into equity and by making cash injection of Rs3.249 billion.

After the issuance of vesting order and formation of IDBL, the SBP would take further measures while the possibility of converting IDBL into a development financial institution (DFI)/infrastructure bank through public-private partnership would also be explored, the minutes showed.

http://www.thenews.com.pk/daily_detail.asp?id=194290
Quote this message in a reply
Post Reply 


Possibly Related Threads...
Thread: Author Replies: Views: Last Post
  Finance Minister Unveils Export-Import Bank (EXIM) in Islamabad LRE-Azan 0 509 12-22-2023 06:36 PM
Last Post: LRE-Azan
  Finance Minister Orders The Balloting Of Nilore Heights-1 Project* LRE-Azan 0 875 04-29-2023 06:14 PM
Last Post: LRE-Azan
  China rolls over $2bn loan to Pakistan: Foreign Minister Ishaq Dar LRE-Azan 0 1,005 04-01-2023 01:02 PM
Last Post: LRE-Azan
  The ministry is considering introducing a bill to safeguard the property of Overseas LRE-Azan 0 954 04-01-2023 12:56 PM
Last Post: LRE-Azan
  Punjab Government approves Small Industrial Estate Policy 2023 LRE-Azan 0 902 04-01-2023 12:54 PM
Last Post: LRE-Azan
  Chinese Group Interested in Building an Industrial Plant in Punjab LRE-Azan 0 896 03-01-2023 08:09 PM
Last Post: LRE-Azan
  RUDA’s industrial zone emulates measures to fight pollution LRE-Azan 0 1,026 01-18-2023 02:57 PM
Last Post: LRE-Azan
  Pakistan, China ink framework agreement on industrial cooperation under CPEC LRE-Azan 0 1,781 02-06-2022 02:26 PM
Last Post: LRE-Azan
  GIEDA had Completely Ignored the Rules in allotting Commercial & Industrial plots LRE-Azan 0 5,671 01-03-2018 04:43 PM
Last Post: LRE-Azan
  Housing ministry allocates 70 plots against constitutional quotas LRE-Azan 0 4,401 11-06-2017 04:37 PM
Last Post: LRE-Azan
  CDA mulls shifting industrial zone Salman 0 4,773 02-26-2014 10:33 PM
Last Post: Salman
Smile Gawadar Industrial Estate Development Authority Newspaper Ad Salman 0 5,417 02-26-2014 10:16 PM
Last Post: Salman
  Old property tax rates restored : PA adopts Punjab Finance Bill Salman 0 4,799 02-15-2014 06:10 PM
Last Post: Salman
  Ministry of commerce Employees co op housing scheme Islamabad newspaper ad CMY 0 8,910 01-21-2014 09:39 PM
Last Post: CMY
  CDA focuses on commercial activity in industrial area Salman 0 4,714 01-20-2014 07:41 PM
Last Post: Salman
  Garments industrial zone renamed Punjab Apparel Park CMY 0 4,377 01-16-2014 09:11 AM
Last Post: CMY
  Housing Ministry asked to devise mechanism for ensuring transparency Salman 0 4,930 01-15-2014 05:10 PM
Last Post: Salman
  State Bank Remove Loan Limit for Real Estate Sector Salman 0 6,202 01-07-2014 02:29 PM
Last Post: Salman
  Punjab Government Issues Final Warning To The Industrial Units In Residential Areas Salman 0 6,454 12-13-2013 12:15 PM
Last Post: Salman
  Punjab Government Issues Final Warning To The Industrial Units In Residential Areas Salman 0 6,598 12-11-2013 06:07 PM
Last Post: Salman

Forum Jump:


User(s) browsing this thread: 1 Guest(s)