ISLAMABAD, Dec16 The move for the restructuring of Industrial Development Bank of Pakistan (IDBP) and convert it into a viable development finance institution (DFI) was blocked by members of National Assembly standing committee on Finance here on Wednesday.

The committee discussed in detail the proposed amendment to the IDBP Ordinance for its conversion into a DFI, which was severely opposed by the members.

After failing to convince the members to approve the bill, chairperson of the committee Fauzia Wahab directed the IDBP and the finance ministry officials to present the future restructuring plan of the bank.

The committee was informed that the government would adopt the accumulated loss of Rs28 billion and inject more money in the bank to make it viable.

However, the majority of the members proposed to privatise, wind up or merge IDBP into National Bank of Pakistan or any other institution rather than risking the public money into the loss making entity.

“Nobody will believe that the IDBP after restructuring would be able to compete with existing banking and DFIs and become profitable,” said Shahid Khaqan Abbasi.

While, other members including Bushra Gohar, Khalida Mansoor, Abdul Rashid Godil, Arif Aziz Sheikh and Kashmala Tariq unanimously stated that the government-owned banks cannot become profitable.

“The ministry wants us to lay seeds for another scandal like that of Bank of Punjab, Bolan Bank and Mehran Bank,” the members said.

Responding to the queries managing director IDBP informed the committee that the bank had financed around 8,000 projects between 1961 and 2000.

The committee was told that various issues including bad debts and the impact of depreciation of rupee against dollar-dominated loans led to the financial collapse of IDBP.

The official said that most of the IDBP financing was sponsored by the Asian Development Bank and World Bank, while backup guarantees were provided by the central bank prior to the restructuring of the banking sector in late 1990s.