Banks lost Rs 2.2bn to loan write-offs since March 2008

Daily Times  - 

* Finance adviser tells NA prices of chicken increased by 23 percent, mutton by 17 percent, beef by 19 percent during last year

ISLAMABAD: Commercial banks in the country suffered losses of Rs 2.27 billion due to the writing-off of loans from March 2008 to date, the National Assembly was informed during the question hour on Wednesday.

“The board of directors (BoD) of a commercial bank is competent to reschedule or write off irrecoverable and bad loans in the light of policy developed on the basis of parameters given in the State Bank Of Pakistan’s (SBP’s) circular,” Prime Minister’s Adviser on Finance Abdul Hafeez Shaikh said in a written reply to the NA.

He said banks entered into loan writing-off agreements with clients purely on commercial basis in accordance with written policies and by properly assessing the payback capabilities of their clients.

“However, in the cases of wilful default or delays, banks adopt legal course of action in the light of policies of their BoDs and debt collection guidelines contained in SBP’s circular No 13 of 2008,” he said.

To another question, Shaikh said during the last one year, prices of chicken increased by 23 percent, mutton by 17 percent and beef by 19 percent.

He said there were certain factors influencing the prices of meat in the country, including disruption in the movement of livestock due to the security situation, smuggling of livestock to neighbouring countries and an increase in transportation costs following the impact of rising trend in world oil prices.

The strategy to control prices of meat must centre on improving supply across the country, Shaikh said, adding that the government had taken several steps in order to improve the same, including allowing the import of livestock and Halal meat.

To a question, the NA was informed that as per the notification issued by the government of Gilgit-Baltistan, five villages in Hunza–Nagar district had been declared calamity-hit.

These are Attabad Bala, Attabad Paeen, Sarat Bala, Sarat Paeen and Gojal tehsil.

In a written reply, Minister of State for Economic Affairs Hina Rabbani Khar informed the House that real GDP growth was expected to remain higher than 3.4 percent in the current fiscal year against 2 percent in the last.

She said the government had been successful in decreasing the fiscal deficit, which would decline to 4.9 percent by the end of the year as compared to 5.2 in the last.

Minister for Labour and Manpower Khurshid Ahmad Shah informed the House that trade volume between Pakistan and Afghanistan had reached around $2 billion per annum and was expected to increase further, as the government was taking various measures in this regard.

He said Pakistan’s trade deficit was $14 billion and the main reason for the deficit was the import of petroleum products.