Lahore
Lahore High Court (LHC) has ordered the State Bank of Pakistan (SBP) to submit the list of individuals whose loans were written off by commercial banks in the last 40 years.
State Bank of Pakistan Assistant Chief Manager Zahid Pervez appeared in the court of Chief Justice Khawaja Muhammad Shairf and requested an extension for submitting the list. Pervez submitted that he had only received a copy of the petition the day before and had forwarded it and sent it to SBP head office in Karachi promptly. The court adjourned the hearing to November 5.
A petition was filed by Imran Khan of Pakpattan Sharif, which stated that commercial banks had written off loans worth Rs 50.8 billion rupees in the last two years. The petitioner stated that over the last 40 years, loans worth Rs 256 billion had been written off.
Khan said that, SBP being the regulatory authority of all commercial banks should have conducted an inquiry to ensure that no financial impropriety had occurred in writing off the loans. He stated “it must be ascertained whether people and firms, who got their loans written-off, actually went bankrupt”.
The petitioner added that banks maintain an aggressive posture against small defaulters. Citing an example, he referred to a man who committed suicide after being hounded by recovery teams defaulting on a Rs 250,000 loan. He claimed it was ironic that defaulters of small loans were hunted down, while multi million rupee loans were written off simply because the debtors were well connected.
The petition stated that Pakistan owed $55 billion in external debt with an annual interest of $2 billion. The Country’s internal debt as of March this year stood at Rs 4.5 trillion.
The petition asked the court to order the recovery of all written off loans.
