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NDFC to be merged with NBP on Thursday

October 30, 2001

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KARACHI, Oct 29: The State Bank said on Monday that National Development Finance Corporation (NDFC) will stand amalgamated with the state-run National Bank from Thursday (November 1). The central bank said the government had approved the scheme of amalgamation.

The SBP said in a press release that from Thursday all the NDFC depositors would be free to withdraw full amount standing to their credit as on August 27 minus any withdrawal that they had made since then.

On August 27 the government had slapped a moratorium on the NDFC to prepare it for amalgamation with the NBP. The step was taken in the wake of “colossal losses suffered by the corporation during recent years.”

The SBP had then allowed small depositors, trusts and welfare institutions to withdraw up to Rs 250,000 from their suspended accounts. The NDFC sources say a little less than Rs4 billion has so far been withdrawn by more than 30,000 depositors.

Under amalgamation scheme “the assets and liabilities of the NDFC will be transferred to the NBP as on October 31, 2001 to offset the losses sustained by the NDFC. “Under this scheme the federal government and the State Bank have decided to write off Rs15.86 billion worth of loans/credit to fill in the gap between the assets and liabilities of the corporation. The SBP release says though depositors are allowed to make withdrawals from their deposits from November 1, they also have the choice to negotiate with the NBP for availing any of its investment schemes.

NDFC EMPLOYEES: NDFC Staff Union (CBA) president Syed Nasir Ali told Dawn that the ministry of finance had already approved severance pay scheme for 720 staff and officers of the NDFC. But he said due to incorrect interpretation of the scheme those who had not completed 10 years of service with the NDFC might not get anything while leaving the corporation for good.

“We appeal to the authorities to give these employees all the benefits that the others are getting or absorb them in the National Bank,” he said while talking to Dawn on Monday. The number of such employees is 255.

Nasir Ali said the NDFC Staff Union was also preparing to move courts against what he termed unjust interpretation of the severance scheme. Sources in the NDFC said that all the staff and officers of corporation are going to get an amount equivalent to 2.75 times basic pay for each year completed of their service — or 1.5 times basic pay for each of the remaining year of service — whichever is lesser.