Who Owns Pakistan - Yimg
Who Owns Pakistan - Yimg
Who Owns Pakistan - Yimg
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10, 1997, the Supreme Court observed that " there appears to be no statutory<br />
rules or regulations or any expressed policy guideline issued by the State Bank<br />
of <strong>Pakistan</strong>, regulating or controlling the powers of banks to write-off, reschedule<br />
loans and interest which is being exercised by these banks, arbitrarily, without<br />
keeping in view the commercial considerations".<br />
The revival of sick industrial units is an important priority for Nawaz Sharif govt<br />
and the reason for this priority is not difficult to understand if one goes through<br />
the list of biggest defaulters in the country. How the concept of reviving sick<br />
industries has evolved is itself a meaningful comment on how the system works<br />
and how corruption breeds corruption?<br />
The H U Beg committee granted relief to hundards of sick industrial units and<br />
fathered the idea of another committee by recommending that relief be provided<br />
by reducing or rescheduling the loans of hundards of sick industrial units, " on<br />
case by case basis". This led to the creation of another committee by <strong>Pakistan</strong><br />
Banking Council, in 1987 to provide relief to sick units, on permanent basis.<br />
In 1988, <strong>Pakistan</strong> Banking Council empowered the board of nationalized<br />
commercial banks to write-off restructure loans up to Rs 1.00 million but loans<br />
above 1 million were to be referred to PBC Committee. In 1991, during Nawaz<br />
Sharif premiership, board of directors of all the financial institutions were<br />
empowered to write-off any loan.<br />
The meetings of Federation of <strong>Pakistan</strong> Chamber of Commerce and Industry<br />
Committee (FPCCI) for revival of sick industries during second Benazir govt were<br />
chaired by Asif Zardari and it was during this period that FPCCI proclaimed<br />
proudly that it had managed the restructuring and rescheduling of 400 cases or<br />
Rs 24 billion and advised sponsors of sick/closed units, " in their own interest" to<br />
contact the federation and avail the opportunity of settling their cases with banks<br />
to make their units operational". We have already seen pervious pages that<br />
second Benazir govt scandalously wrote-off loans worth Rs 3,550 millions<br />
including all the loans of Farooq A Sheikh, Chairman FPCCI committee for<br />
revival of sick industrial units.<br />
The practice of writing off/ rescheduling loans has become a big business. In fact<br />
it is such a powerful and lucrative business that honest and professional bankers<br />
were reluctant to talk against this evil. A senior banker from National<br />
Development Finance Corporation (NDFC) who had done a comprehensive<br />
study on the problem of loan default came all the way from Karachi to Islamabad,<br />
to speak on the subject at Sustainable Development Institute (SDI) in December<br />
1996 but on the condition that he would not be reported or quoted.<br />
" The concept of bad loans is gone, we call them non-performing loans", V A<br />
Jaffery, Benazir govt's advisor on Economic Affairs observed at a press<br />
conference with bits of sarcasm and helplessness.<br />
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