ISLAMABAD, Feb 11: Ignoring its own policy and rules, the state-run National Bank of Pakistan has extended a Rs8.9 million loan to Chief Justice of Pakistan Abdul Hameed Dogar under the bank’s flagship ‘Saibaan’ Housing Finance scheme, it is learnt.

The policy deviations were approved by the bank’s high-level Credit Committee on the grounds that the applicant “is working as Chief Justice of Pakistan”, NBP record shows.

The Rs8.9 million loan is repayable in 11 years at a mark up of 9.25 per cent rather than the standard Saibaan rate of 13 per cent. Mr Abdul Hameed Dogar took oath as chief justice of Pakistan on November 3, 2007, and he applied for the loan two days later i.e. November 5, according to the NBP’s record available with Dawn. His existing rate with Standard Chartered Bank was 9.64 per cent.

When contacted for comments, Abbas Zaidi, private secretary to the Chief Justice, said he knew about the case but obviously the Chief Justice could not talk to the media. He said only the registrar’s office was authorised to comment on the subject. Registrar of the Supreme Court Raja Lehrasib Khan took time for consultations and then responded later by saying the report was totally baseless and even the NBP had denied the report.

The Chief Justice had applied for the Saibaan loan under balance transfer facility amount of Rs8.9 million soon after taking oath as the country’s chief justice, although he had originally obtained the loan from Standard Chartered Bank in July last year. As such, the SCB loan stood transferred to the NBP.

All Saibaan loans attract about 13 per cent mark up but the loan to the chief justice was extended at an unusually low rate of 9.25 per cent. The bank’s credit committee has the powers to reduce mark up by one per cent for the home finance only on the basis of satisfactory repayment credit history of at least 12 months. “In the given case, applicant’s loan was disbursed in July 2007 as per offer letter issued by the SCB & applicant unable to arrange 12 months credit history from his previous bank. In this connection, one per cent discount on NBP mark up rate i.e. 13 per cent is not given to the applicant. Keeping in view Chief Justice of Pakistan request for discount in his existing mark up rate of 9.64 per cent of previous bank, a 0.39 per cent discount on his existing market rate i.e. from 9.64 per cent to 9.25 per cent is recommended for approval,” the NBP’s record suggest.The bank’s credit committee also noted another policy deviation. It said the “applicant to be age of 74 years & 8 months at the time of loan maturity as against the current policy of 60 years for salaried persons”.

Moreover, “as per present Saibaan Policy, rental income is not allowed. However, in the given case applicant has requested to club the rental income Rs110,000”. On the basis of these recommendations on November 20, the NBP’s head office issued the “approval cum sanction advice-Saiban” to the relevant branch on November 22.

The bank noted that the applicant’s service period is 7 years and 5 months which has been verified from September 07 salary slip. It said the applicant is working as chief justice of Pakistan effective from November 03, 2007, and his gross salary is Rs148,250 per month as per Supreme Court of Pakistan, Islamabad, letters of November 17. “Chief Justice of Pakistan is the owner of the property i.e. House No 11/11/1, street 30 at the Defence Housing Scheme Ext V, Karachi which is already mortgaged with SCB as per bank’s letter”.

NBP’s senior vice-president Zubair Mirza told Dawn that the loan had been disbursed to the chief justice who had already started repaying his instalments regularly. He defended the policy deviations by saying that 10,000 borrowers could not fit in one straight jacket and the bank had to be flexible in a competitive market. He said there was no reason for the NBP to decline loan to a client who had met the strict parameters of a much stronger foreign bank and in fact it was a great thing for the NBP to take away a valuable client from SCB.

He said the borrower (the chief justice) was entitled to have loan up to 80 per cent of his property’s value and he had not availed even half of that ceiling. Secondly, the borrower’s monthly salary is sufficient to cover monthly instalments of the loan while the third deviation of age limit is covered by post-retirement benefits of the chief justice whose property is pledged as registered mortgage. Therefore, the security of the bank’s money is more than sufficient and it had not provided any favour to the borrower. He said there was not something unusual about lower interest rates.

The Chief Justice of Pakistan will have to make monthly instalments of Rs107,684. The final repayment date is December 1, 2018, to be paid at NBP’s Hub Branch.