February 1, 2002	Friday	Ziqa’ad 17, 1422

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MUZAFFARABAD, Jan 31: The AJK Cooperatives Department has asked the government to pay the outstanding mark-up against debtors in the Indian firing affected areas from Zakat profit fund so that the AJK Cooperatives Bank could reimburse the credit to the Federal Cooperatives Bank, sources told Dawn on Thursday.

They said the cooperatives bank loan to the tune of Rs136.343 million (Rs89.639 principal amount and Rs46.703 mark-up) had been defaulted of which Rs46.203 million (Rs27.328 million principal amount and Rs18.875 mark-up) were to be recovered from the cooperative societies in the border areas.

The government had been deferring the recovery of loans either due to natural calamities or Indian firing. But, the deferment was stopped in all areas in June 1998, except for the Neelum Valley, in accordance with a judgement of the high court in November 2000.

Principal amount of loan extended in 197 villages in the border areas of seven AJK districts is Rs27.328 million, whereas the mark-up on it has accumulated to the tune of Rs 18.875 million.

The mark-up on the loans given in 1980 was more than its principal amount whereas on those extended in 1996-97, it was less than the principal money.

The sources said the Federal Cooperatives Bank (FCB) had mounted pressure, for recovery and reimbursement of the amount, on the AJK bank which received credit for loaning from the federal bank.

FCB board of directors had met in November last year, with Pakistan State Bank governor in the chair, where among other issues AJK bank affairs were also discussed, they said.

The governor had given target to the Azad Kashmir bank to deposit Rs10 million in the first week of December, Rs18.8 million by Dec 31 and Rs90.12 by January 2002. But, it could only deposit Rs10 million and was in a fix to arrange the remaining Rs108.92 million.

In the wake of this problem, the Cooperatives Department has asked the government to pay the outstanding Rs18.875 million mark-up from the Zakat profit fund while the remaining amount would be paid by the societies themselves.

This would help the AJK bank to reimburse the installments to the federal bank and also help rid the residents of the border areas from the mark-up.

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