Pakistan : Terrorist Wahabi Islamic Rep Pakistan 6

[Naresh]

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[url="http://www.dailytimes.com.pk/default.asp?page=2010/06/20/story_20-6-2010_pg3_1"]Rule of the kleptocracy[/url]



The Supreme Court (SC) of Pakistan is looking into the loan write-offs scam conducted through the nexus of powerful elements in the ruling elite and the State Bank of Pakistan (SBP) during successive governments that involved billions of rupees of public money. The SC had first taken suo motu notice of this issue in 2007 when a news report claimed that, from 2002 to 2007, the military government had written off Rs53.499 billion of bank loans. In the past hearings of this case, the SC had expanded the scope of inquiry to include all the loans written off since 1971. The total figure of [color="#FF0000"]Rs 256.665 billion[/color] for this period submitted in February by the SBP is too ambiguous to explain the nature of the write offs, whether they were genuine or vested interest-driven. Moreover, the list of loans did not does not cover the entire spectrum of lending institutions in the public and private sector, suggesting that the actual figure may be far bigger than this.



To remove the ambiguity, the SC has now asked for the province-wise details of the loan write-offs, their terms and collaterals pledged, etc. It has also enunciated that in case of non-payment of loans by illegal defaulters, criminal cases shall be instituted against them. In its proceedings, the SC has also made a distinction between genuine borrowers for house construction and business purposes and those whose prime aim is to get the loan ultimately written off. Unfortunately, the banks impound properties of genuine defaulters and sell them at throwaway prices, while the rich, powerful and well-connected wilful defaulters get off scot-free. The ultimate losers are the depositors whose money gets swindled by banks and their favoured clients in this manner.



Loan write-offs in themselves are an accepted financial arrangement between the borrower and the bank, when a genuine party defaults due to financial losses or the projects for which the loan was taken failing due to legitimate reasons. This arrangement serves both the banks and the borrowers, as the bank may decide to write off the entire or part of the debt according to the nature of the case. The problem occurs when banks lend irresponsibly to a variety of borrowers due to political pressure. These may include schemes that the banks consider non-viable, personal loans, or lending against inadequate collateral. The SC is currently hearing one such case involving The Bank of Punjab for issuing loans against fake collateral.



The pattern of irresponsible lending transcends a particular regime or government in power. Both the civilian and military governments have been practising and perpetuating a culture of kleptocracy. Businessmen-turned-politicians, military and civilian bureaucracies, all are involved in this dirty game. In this whole issue, a huge question mark has been put on the impartiality and independence of the SBP, which is supposed to regulate the banking sector and approve such loan write-offs. By not being able to curb false write-offs, it is party to this massive financial crime.



The task before the SC is huge and of tremendous import, because most often individual beneficiaries are hidden behind the names of firms and corporations. While this exercise may not recover all the written off loans, it is essential to expose the horizontal and vertical connections between business, politics and banking, and induce accountability and transparency within the SBP’s working, which has so far been very non-transparent and unsatisfactory.



Mudy Ji : Do you think that CJ (PakJabi) is working in "Cahoots" with Pakjabi Army (Kiyani is PakJabi) to get rid of "Sindhi" Mr. 10%?



Cheers