Loans worth Rs.62 bn written off, Pakistan court told

Islamabad, Oct 21 (IANS) Loans worth over Rs.62 billion granted to top business firms had been written off over a 12 year period, the State Bank of Pakistan (SBP) told the Supreme Court.

The massive loans were written off by banks between 1996 and 2008, said the country’s central bank.

SBP counsel Syed Iqbal Haider submitted to the court two lists of top 50 beneficiaries whose loans were written off, Dawn reported Thursday.

The first list has the names of companies that got loans of Rs.47.10 billion written off on a stand alone basis, and the second list contains the names of those who got Rs.15.55 billion worth of loans waived under a special banking circular.

The lists were submitted in compliance with the court’s directive to the central bank to cite at least 10 cases between 1971 and 2009 to prove that loans had been written off after fulfilling banking rules and regulations.

A three-judge bench, headed by Chief Justice Iftikhar Mohammad Chaudhry, had taken notice of reports that the central bank had allowed commercial banks to write off loans of Rs.54.6 billion under a scheme introduced by former president Pervez Musharraf, the media report said.

Advocate Abdul Hafeez Pirzada, who appeared as amicus curiae (friend of the court), said that about 38 banks were functioning in Pakistan and they extended benefits to borrowers under different banking circulars.

‘The total written off amount is now estimated to be around Rs.300 billion and Rs.50 billion was waived during the past one year alone,’ he was quoted as saying.

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