LAHORE, July 29: As ratio of its total advances, the bad loans of the Bank of Punjab (BoP) are claimed to have come down to 11 per cent in the last three months from a staggering 26 per cent.

Talking to Dawn on Tuesday, BoP Managing Director Hamesh Khan attributed the “improvement” to better recoveries by the bank. He did not agree that the improvement in advances, that also doubled to some Rs13 billion during the same period from Rs6 billion, was the “only factor” responsible for the reduction in the percentage of bad loans as ratio of lending. Yet, he frankly admitted it was one of the major factors.

He said the bank had made adequate provisioning in “accordance with the central bank’s regulations”.

Talking about the central bank’s much talked-about guidelines given to commercial banks for writing off irrecoverable loans and advances, Mr Khan said the scheme was implemented by the BoP only in the first week of June, allowing only about three weeks to the defaulters to apply under the scheme.

The last managing director of the bank had refused to implement the scheme in his bank despite repeated letters from the State Bank in this regard.

However, Mr. Khan got it approved from the BoDs in June.

He said the “bank had not received many applications under the scheme”. He said all applications would be decided by August 31. He further said the bank was willing to accommodate any defaulter wishing to settle his loan outside the scheme. But, he said, the BoP would not be able to give the incentives offered in the State Bank scheme.

The BoP is the 6th largest bank of the country in terms of its branches. Out of its 242 branches, seven are located in Islamabad and three in other provinces.

The bank plans to roll out four consumer finance products from the middle of August. The products include financing for housing, cars and SMEs. Besides, personal loan scheme will be launched.