LAHORE, June 5: Various commercial banks and development finance institutions (DFIs) have settled or restructured loans of some 18,000 delinquent borrowers involving an outstanding default amount of Rs10 billion under the central bank’s guidelines/scheme for the write-off of irrecoverable loans and advances.

Central bank officials told Dawn on Thursday that commercial banks and DFIs had received a total of 20,137 requests from the borrowers seeking settlement of their debts involving an outstanding amount of Rs38 billion. They said the amount involved in the cases settled by the banks or DFIs so far showed that they had been laying greater stress on restructuring the smaller loans — 26 per cent of the default amount has been settled — to bring down the number of the cases pending with them.

After settlement of the bulk of the cases, the officials said, the bankers were now seized with the remaining 2,137 applications, which involve a default amount of Rs28 billion.

The central bank had issued the guidelines on the write-off scheme in its Circular BPD-29 on October 15 last year for the settlement of irrecoverable loans and advances.

The last date for availing the scheme is June 30, 2003.

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.

A previous such amnesty given by the State Bank in 1997 had resulted in the return or rescheduling of loans of about Rs5 billion.

The SBP has also set up a committee of businessmen and bankers to resolve the disputes and issues that may crop up between DFIs/ banks and their delinquent borrowers during the processing of the applications submitted under the scheme.

The committee, according to one of its members, had received a total of 598 complaints against the banks/DFIs from the borrowers since its establishment. Out of them, it has disposed of 59 cases while rejecting eight complaints.