June 15, 2003	Sunday	Rabi-us-Sani 14, 1424

ISLAMABAD, June 14: The public sector banks and development finance institutions (DFIs) written off a total of Rs11.9 billion loans from 1999 to date, the National Assembly was informed here on Saturday through a written reply.

Finance Minister Shaukat Aziz stated that out of this Rs11.9 billion, a principal amount of Rs5.6 billion was written off while Rs6.2 billion was mark-up on it.

In addition to this, Zari Taraqiati Bank Limited (ZTBL) has also written off Rs5 billion agriculture loans and Rs1.7 billion agro industry loans.

He said as many as 11 US companies preparing consumable items remitted foreign exchange worth $41.432 million from Pakistan during the last three years, the highest being Pepsi Cola International, which transferred $7.177 million on account of royalty and technical assistance.

These 11 US companies remitted $41.432 million on account of their profit/dividend. The amount remitted in 2000, 2001 and 2002 include $26.248 million, $2.417 million and $12.767 million, respectively.

In reply to a question, the finance minister informed the assembly that inward remittances of foreign airlines during the last ten years were $375.8 million while outward remittances were $1999.4 million.

He said the Committee for Revival of Sick Industrial Units (CRSIU) was conducting a survey in the country to determine the exact number of industrial units, which have been closed.

He said the government had taken a number of steps to make the sick units operational. In this regard the government had established the Corporate and Industrial Restructuring Corporation (CRC) in September 2000 to make provisions for the acquisition, restructuring, rehabilitation, management, disposition and realization of non-performing loans and other assets of different banks and financial institutions.

Besides, the CRSIU was set up in May 2000 to identify the causes of sickness and recommend measures for their revival, through loan rescheduling, debt equity swaps and other appropriate steps.

A total of 334 cases of sick units involving an infected portfolio of Rs72.2 billion were referred to this committee. Of them, 160 units with an outstanding amount of Rs44 billion were revived/restructured leading to general employment opportunities for approximately 46,000 persons.

To make these sick units operational, a scheme was introduced by the State Bank in October 2002 to assist the banks/financial institutions to deal with their non-performing portfolio where possibility of recovery was low by giving the option of rescheduling/settlement between the banks and the borrowers. The incentive scheme will expire on June 30, 2003.

The finance minister said the SBP management had been bifurcated into two institutions, which will help them concentrate on their core functions of monetary policy, foreign exchange reserves management, banking supervision and payment systems, while the routine banking operation would be taken care of by a separate entity.

Mr Shaukat said 1,390 ZTBL employees had been discharged under the Golden Handshake Scheme (GHS) as on April 29, 2003. Of them, 1,283 employees have been paid their dues, while payments to 47 employees were under process.

He said that prior to restructuring, recovery rate of ZTBL ranged between 49 per cent and 56 per cent in the last five years. Pursuant to ZTBL’s persistent efforts, the recovery rate in the current year has shown a growth of 2.4 per cent.

To improve the recovery rate, the promotions of bank officers have been linked with their performance about recovery in addition to the facility of remission of mark-up to three per cent for timely repayment by the borrowers, the minister added.