KARACHI, April 20: Senate Standing Committee on Finance and Banking has asked the Industrial Development Bank of Pakistan (IDBP) to furnish last three years complete report on sanctioning, rescheduling and write offs of loans, official sources said. The IDBP is presently faced with financial crisis because most of its infected loans have been written off despite the dissenting note from one of its senior board member, the sources said.
Even the State Bank has asked the Bank to give details and should come up with reasons for writing off loan to the tune of billions of rupees. The senior member of the IDBP board had on record objected to the write-off and also pointed out in his written report that many loans could be recovered particularly when they were backed with tangible securities and personal guarantees of some leading industrial groups.
However, the IDBP board for reasons best known to them moved ahead and tried to justify the approval for writing off these loans. State Bank sources said that recently around Rs3 billion has been injected into the bank to keep it solvent.
The IDBP is a statutory body created through legislation therefore it is not easy to dissolve the bank with administrative decision. However, if the financial health of the IDBP do not improve and write-offs are made without keeping the interest of the bank the SBP would soon find it difficult to keep it solvent, banking circles said.
