August 17, 2003	Sunday	Jumadi-us-Sani 18, 1424

LAHORE, Aug 16: National Bank of Pakistan (NBP) is alleged to have processed and settled less than 100 out of over 550 cases received by it for settlement under the central bank’s guidelines for the write-off of irrecoverable loans/advances issued to banks and DFIs through its circular BPD-29 in October last year.

“NBP is now trying to get the last date of Aug 31 for settling all such applications extended. We know it for sure that the bank has already approached the central bank for extension in the date just to cover up its reluctance to speedily settle applications,” a senior businessman told this reporter here on Saturday.

“We are dismayed that the bank is evading its responsibilities as implied in the circular BPD-29,” said an official of the LCCI. He claimed that the “chamber had received at least 100 complaints from borrowers seeking a final settlement of their NPAs under the scheme”. He said even those who had approached NBP for depositing down payment five months or more ago had not received any reply so far.

The last date for applying under the scheme expired on June 30, while the central bank has asked the banks and DFIs to settle all applications by Aug 31. “It is quite disheartening that NBP, that failed to finalize one-fifth of the applications in 10 months, is now asking for extension in the last date,” a borrower, whose own application is also pending with the bank, said. “The delay being caused by the bankers in settling the applications is creating an unrest among the businessmen who want their NPAs to be settled at the earliest possible so that they could focus their attention on their business.”

When approached, a senior member of the SBP Dispute Resolution Committee, set up to resolve disputes cropping up between bankers and borrowers during the settlement of the NPAs under the scheme, also confirmed that NBP was delaying finalization of the cases it had received for settlement under the guidelines.

He alleged that another two banks — Allied Bank Ltd (ABL) and PICIC — were also slow in dealing with such cases. He added: “ABL is not providing to the committee the details of steps it is supposed to take to execute the committee’s decisions on disputes arising between the bank and its borrowers. The bank’s reluctance is indicative of the fact that the committee’s decisions are not being implemented.”

It is also alleged that some banks were refusing to settle big loan default cases despite the fact that they fulfil the criteria as laid down in the SBP guidelines.

“There are several instances where bankers presented such cases to the committee for their settlement. However, we have asked the bankers to settle such cases on merit, and bring only those cases before the committee where there is a dispute with the borrowers,” the committee member said. He said the “reluctance of the bankers to write off big NPAs stemmed from their fear of victimization by the law enforcing agencies like NAB or future governments.”

According to him, the fear prevailed despite the fact that the SBP write-off guidelines had made settlements of NPAs much easier for bankers under a transparent, pragmatic scheme. “Moreover, the Sindh High Court also ruled in a case in June that the SBP write- off guidelines are binding on all banks and DFIs. Hence they need not fear anyone and settle the issue of NPAs in this country once for all,” he maintained.

He also stated that the committee had asked the banks to treat “big and small borrowers alike because it had been brought to our notice that the smaller borrowers are getting raw deal from their banks”. “The committee itself has focussed more on the resolution of problems faced by small borrowers rather than bigger ones.”