June 11, 2003	Wednesday	Rabi-us-Sani 10, 1424

LAHORE, June 10: The Securities & Exchange Commission of Pakistan (SECP) has asked the associations representing various non-bank financial institutions (NBFIs) to facilitate the settlement of non-performing accounts of their member companies in line with the “spirit” of the central bank’s guidelines on the write-off of irrecoverable loans if any such matter is brought up with them.

However, the SECP has once again rejected the request to issue any guidelines for the NBFIs on the write-off of their infected loans or advances.

The request was made by the members of the committee formed by the central bank for sorting out the disputes that could crop up between delinquent borrowers and lending banks/DFIs during the settlement of the irrecoverable loans/ advances under its scheme.

In a letter sent to various association, including Leasing Association of Pakistan (LAP), Modaraba Association of Pakistan (MAP) and the Investment Banks Association of Pakistan (IBAP), the SECP said there was no need to issue any guidelines on the write-off of the loans for the NBFIs.

The commission has concluded against issuing its guidelines, similar to the ones given by the central bank in its scheme for the banks and DFIs in its circular BPD-29, after having heard the viewpoint of the LAP, the MAP and the IBAP.

But the sources informed Dawn here on Monday that the Securities & Exchange Commission of Pakistan has advised the central bank’s committee to send its proposals on the “matters relating to the problem loans to the respective industry associations, that is, LAP, MAP, IBAP, etc.”

The associations have been asked to act as facilitators and to pursue the case with the NBFI concerned for the resolution of the matter amicably in the best interest of the economy.

The central bank had issued its guidelines on October 15. The scheme originally addressed those projects whose loans and advances have been classified as loss for three years.

The scheme was amended later on to include the borrowers of the restructured loans and advances in order to facilitate them to get their debts settled if they have defaulted on their fresh payment schedule.

Different banks and DFIs have so far settled loans of 18,000 borrowers involving an outstanding default amount of Rs10 billion under the guidelines.

The banks and DFIs have received a total of 20,137 requests from the borrowers seeking settlement of their debts involving an outstanding amount of Rs38 billion.