Islamabad: The Supreme Court was informed on Monday; that loans worth Rs 74 billion of 454,737 borrowers were written off during the year 2008-09. The Court has advised Mr. Iqbal Haider, counsel of State Bank of Pakistan to ask Governor SBP to take personal interest in the issue raised.
Earlier the Supreme Court of Pakistan had taken a Sou motu action regarding the written off loans. A four member bench comprising of Chief Justice of Pakistan Mr. Iftikhar Muhammad Chaudry, Justice Ghulam Rabbani, Justice Muhammad Sair Ali and Justice Khalil ur Rehman Ramday is hearing the case.
The SBP counsel has presented five volumes of report prepared over loans written off during 2008-09. According to this report about 8,698 borrowers who taken loans over 0.5 million each got their loans written off. The total amount against these loans is 38 billion. And about 44,649 are those persons who got loans less than 0.5 million each. The total amount written off is 36 billion.
Mr. Haider also informed court that until Dec, 2009, about 57 thousand cases of defaulters were under adjudication before courts and banking tribunals. The recovery of about 215 billion rupees was made.
Mr. Haider also submitted reports on Redco Textile and Indus Sugar Mills. However, the court directed SBP counsel to provide reports duly signed by Governor State Bank Mr. Shahid Kardar for taking complete responsibility of such reports. The court also inquired about the loans taken by Indus Sugar mills and asked how was it possible that in May 2003 the request for writing off loans of Indus Sugar mill was refused and later on in Oct, 2003 it was accepted. The CJP has also asked the counsel of Indus Sugar Mill whether it was closed or operational at that time.
The SBP counsel said according to the report the operations of Indus Sugar Mills remained stopped until 1999 due to the collapse of the building. The other members of the bench inquired whether the sugar mill had done any business and also that if the labourers were laid off.
Mr. Zafar the Sugar mill’s counsel has told court that some of the business has been started. One of counsel of the applicant told court that these loans were written off under the political influence rather than on merit.
About Redco Textile report, it was informed that NAB had arrested the company’s directors due to violations and had taken action against them. The court pointed out the check list given for Redco Textile is missing in Indus Sugar Textile Mills case and it seems biased.