Written-off loans case: Supreme Court hints at summoning SBP governor

The Supreme Court on Monday said that it might summon governor State Bank of Pakistan (SBP), warning that the court could go to any extent to recover the written off loans, which is a public money. A four-member bench headed by Chief Justice Iftikhar Muhammad Chaudhry comprising Justice Muhammad Sair Ali, Justice Ghulam Rabbani and Justice Khalil-ur-Rehman Ramday, was hearing a suo motu case on Rs 54 billion written off bank loans.
Besides, the Supreme Court sought details of loans, written off during last two years and observed that if good governance was to be ensured, the government have to proceed against those who got their loans written off. The bench also directed SBP to furnish all details of the loans, obtained by Indus Sugar Mills and Redco Textile Mills, which were waived off by the then government.
Justice Chaudhry remarked, "the court has nothing to do with the influence any person enjoys or enjoyed while being in power as nobody is above the law and no country could move forward without ensuring rule of law." He said that all the written off loans belong to the poor masses of the country, which must be recovered and used on their well being.
Justice Muhammad Sair Ali pointed out that majority of the written off loans were taken by the persons, who enjoyed political influence, flouting the merit. The counsel for SBP Syed Iqbal Haider informed the court that the central bank was a regulatory not the controlling authority, as most of banks were in private sector, and loaning or their waiving off was the prerogative of their board of directors.
Giving details of the written off loans form 1971 to 2009, he said, over 50, 000 persons greased their palms, violating the laid down rules and regulations. The court out rightly rejected the counsel''s request to form a commission for recovery of written off loans from 1971 to 2009.
The bench observed, "when you admit that loans were waived off illegally, why you hesitated so long in taking action against the persons of whom you have all the details. It is easy to promulgate any law when there is a democracy in the country, why the government is reluctant to nab those who have plundered national wealth."
Justice Chaudhry warned that the hearing of waived off loan case could even halt other proceeding for more than three months and make the recovery of trillions of rupees a priority. The CJP said, "People who got their loans written off, are no ordinary persons. Their businesses flourished at the cost of national economy, which is also one of the major reasons of prevailing law and order in the country."
Justice Ramday observed that according to Section 40-A of the Banking Companies Ordinance 1962, it was the responsibility of SBP to protect the interest of the depositors, whose money was given to the big businessmen without taking into consideration the skyrocketing price hike and double digit inflation.
He further added under section 41 of the Banking Ordnance the SBP was empowered to take action against banks, which are violating the said law as it is against public interest. He told the SBP counsel that the approach of the central bank seemed flexible in dealing with banks, which extended loans in billions to the influential at the cost of the poor. The hearing was adjourned till February 14.