Loan write-offs Banks issue notices to defaulters

KARACHI: Banks have already issued notices to defaulters in line with the directives of the Supreme Court, heads of commercial banks informed the State Bank of Pakistan (SBP) at a meeting held Monday.

The SBP convened a meeting of commercial banks and development finance institutions to work out a strategy to recover written-off loans under the directive of the Supreme Court, said a statement.


Banks’ representatives informed the meeting that a write-off was undertaken after all remedies to recover the loan had been exhausted.

They said that the writes-offs were allowed by their boards. They added that a number of prominent industrialists were made to suffer jail sentences and large scale liquidations or auction sales were carried out. “It was also pointed out that 47,911 borrowers having loans of Rs500,000 or below were allowed write-offs under BPD circular No. 29,” the statement said.

The bankers said that they would consult their legal counsels and devise strategies in respect of write-offs and report to the State Bank.

It was agreed in the meeting that the Supreme Court must be provided all necessary information/data and all efforts should be made to deal with the write-offs issue.

The participants saw this initiative of the Supreme Court as an opportunity and hoped that it would result in discouraging willful defaults, improve recovery and bring stringent laws on recovery.

They said they were committed to follow the directives of the Supreme Court.

It may be mentioned here that a three-member bench of the Supreme Court comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Ghulam Rabbani and Justice Khalil-ur-Rehman Ramday is hearing a suo moto case on loan write-offs.