LAHORE, July 22: Some 77 delinquent borrowers, whose cases are now with the Corporate & Industrial Restructuring Corporation (CIRC) for disposal, have shown their eagerness for settling their loans in response to the corporation’s invitations.

The total amount outstanding against these borrowers is stated to be Rs9.46 billion while the CIRC has offered them to pay Rs938 million — around 10 per cent of the entire liability — in order to settle their liabilities once for all.

Officials told Dawn on Tuesday that 19 defaulters have already deposited 10 per cent downpayment of Rs21 million of their entire liabilities after agreement with the CIRC.

“In all we have received offers from a total 44 defaulters who have offered to pay Rs530 million for settling their liabilities. After the payment of downpayment by 21 of them, we’re negotiating with the remaining 23 for final settlement,” the officials said.

The CIRC, according to its officials, was asked to initiate “a loan write-off scheme” on May 15 on the lines of the State Bank’s guidelines on the write-off of irrecoverable loans/advances given to banks on October 15 to clean up their books. The CIRC was told to invite defaulters whose NPAs it had assumed from the banks for settlement by June 30 — the last date for applying with any bank under the central bank’s guidelines on write-off of irrecoverable loans/advances.

“You must appreciate this important fact that we’ve done in 45 days what the banks took eight-and-a-half months to do,” said the officials. They said all the settlements done or being done would be implemented after the approval by the CIRC board of governors. They claimed that the central bank’s guidelines followed the same pattern on which the corporation had earlier been negotiating disputes between the borrowers and their banks.

At present the CIRC, which came into being in the last quarter of 2000, is in possession of some 171 nonperforming accounts (NPAs) with an outstanding liability of Rs40.987 billion. Of them, 163 NPAs with an outstanding amount of Rs19.88 billion are stated to be eligible for disposal by the CIRC under its ordinance.

The CIRC acquires NPAs that are 365 days old and are in excess of Rs30 million.

The corporation has been referred around 719 NPAs with an outstanding amount of Rs130 billion. Of them, it assumed 171 NPAs having an outstanding amount of Rs40.987 billion at their book (independently evaluated) price of Rs4.948 billion, returning the rest of 464 with liabilities of Rs76.792 billion to the banks.

So far, the CIRC claims to have helped resolved 183 cases that involved an outstanding liability of Rs29.682 billion between the borrowers and their banks through its intervention.

The corporation has sold 77 units for Rs2.662 billion.

The CIRC has not assumed any new NPA since the issuance of the central bank’s guidelines in order to facilitate borrowers in making a deal with their banks directly. “We’ll restart assuming more NPAs after August 31 as we’ve been informed that applications received by the banks for settlement of the loans under the central bank’s scheme will be processed and settled by then,” the CIRC officials said. But a senior official cast doubts on the optimism, claiming that some banks were going very “slow” on such cases.

It may be noted that there has been a “good deal of criticism” on the performance of the CIRC by businessmen, who claim it to be “far from satisfactory”.

Though the CIRC disagrees with the general perception, critics say it has been disposing of projects for real estate against the objective of its formation — revival of the industry.