KARACHI: National Bank of Pakistan (NBP) will re-launch the business loan scheme under the Prime Minister’s Youth Programme next month under the Islamic mode of financing, NBP President Saeed Ahmad said while speaking to journalists at the bank’s head office on Friday.
He said the pace of loan disbursement under the scheme has slowed down, adding that the interest-based nature of loans is also a hurdle.
Mr Ahmad said the loan scheme does not have any political connection, although it was designed in the Prime Minister’s Office. The daughter of the former premier, Maryam Nawaz, initially led the initiative, but was removed later on court orders.
The bank is rescheduling around Rs17bn loans extended by its Bangladesh branch
NBP gets the differential on interest from the Ministry of Finance.
“We have every power to allocate funds, scrutinise the applications and keep recovery in check,” he said, adding that recovery is 92-93 per cent, significantly better than that in loans extended to small and medium enterprises. The outstanding amount for four years is about Rs17 billion while the scheme’s target is Rs100bn, he said.
Regarding the Rs18bn scam at the NBP branch in Bangladesh, he said restructuring and rescheduling of loans are under way.
“We are trying to recover the principal amount that is stuck in Bangladesh for which rescheduling is being carried out,” he said, adding that NBP is getting help from Bangladesh’s central bank.
NBP will not go for the recovery of interest on the defaulted amount, he said.
From 2003 to 2012, the Bangladesh branch of NBP lent money to dubious companies without securing collateral.
He said the NBP branch in Beijing will be functional soon.
NBP has signed an agreement with the Poverty Alleviation Fund to provide loans under the youth business loan scheme to 35,000 trained and skilled youths.
Published in Dawn, August 12th, 2017
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