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Image via WikipediaKARACHI (Via The News): The State Bank of Pakistan (SBP) on Wednesday announced a procedure for reimbursement of loan write-offs outstanding as of December 31, 2009 against the borrowers of Malakand, Swat, Buner and Chitral districts under the Prime Minister’s Fiscal Relief Package to rehabilitate economic life in Khyber-Pakhtunkhwa, Federally- and Provincially-Administered Tribal Areas.
According to a circular issued by the central bank, the Finance Ministry has released the budgetary allocation for the purpose.
Banks, development finance institutions (DFIs) and microfinance banks (MFBs) would write-off the entire loans outstanding as of December 31, 2009 of the borrowers of Malakand, Swat, Buner and Chitral districts, it said.
The loans booked in the abovementioned areas and also booked outside the Malakand, Swat, Buner and Chitral districts on behalf of businesses operating/located in these districts would also qualify.
Only the principal amount of outstanding loans (performing and non-performing loans less provisioning) as of December 31, 2009 would qualify for the subsidy.
However, the circular said that the loans disbursed on or after January 1, 2010 would not qualify for the relief and the amount of overdue/outstanding mark-up would also not qualify for the subsidy.
The banks, DFIs and MFBs would bear the cost of such write-offs to the extent of amount held into provision against the non-performing loans and interest in suspense account, while the rest of the cost will be paid by the government as subsidy.
It also said that after internal approvals of write-off of total loans in Malakand, Swat, Buner and Chitral districts as per the above guidelines, the banks, DFIs and MFBs would submit their claims to the office of SBP-BSC (Bank), Peshawar on a prescribed format duly audited and authenticated by their internal audit up to March 15.
However, it said that the amount reimbursed by the SBP-BSC (Bank), Peshawar would be subject to on-site inspection by the State Bank of Pakistan’s Inspection Department and if any amount claimed found ineligible, the same would be required to be refunded by the concerned institutions along with a fine of 25 percent of the amount reimbursed.
“For smooth and timely implementation of the relief package, the banks, DFIs and MFBs are advised to stop recovery and accrual of mark-up of all such outstanding loans immediately and make all-out efforts to publicise the scheme through advertisements, banners and direct contact with the concerned borrowers,” the circular said.
According to a circular issued by the central bank, the Finance Ministry has released the budgetary allocation for the purpose.
Banks, development finance institutions (DFIs) and microfinance banks (MFBs) would write-off the entire loans outstanding as of December 31, 2009 of the borrowers of Malakand, Swat, Buner and Chitral districts, it said.
The loans booked in the abovementioned areas and also booked outside the Malakand, Swat, Buner and Chitral districts on behalf of businesses operating/located in these districts would also qualify.
Only the principal amount of outstanding loans (performing and non-performing loans less provisioning) as of December 31, 2009 would qualify for the subsidy.
However, the circular said that the loans disbursed on or after January 1, 2010 would not qualify for the relief and the amount of overdue/outstanding mark-up would also not qualify for the subsidy.
The banks, DFIs and MFBs would bear the cost of such write-offs to the extent of amount held into provision against the non-performing loans and interest in suspense account, while the rest of the cost will be paid by the government as subsidy.
It also said that after internal approvals of write-off of total loans in Malakand, Swat, Buner and Chitral districts as per the above guidelines, the banks, DFIs and MFBs would submit their claims to the office of SBP-BSC (Bank), Peshawar on a prescribed format duly audited and authenticated by their internal audit up to March 15.
However, it said that the amount reimbursed by the SBP-BSC (Bank), Peshawar would be subject to on-site inspection by the State Bank of Pakistan’s Inspection Department and if any amount claimed found ineligible, the same would be required to be refunded by the concerned institutions along with a fine of 25 percent of the amount reimbursed.
“For smooth and timely implementation of the relief package, the banks, DFIs and MFBs are advised to stop recovery and accrual of mark-up of all such outstanding loans immediately and make all-out efforts to publicise the scheme through advertisements, banners and direct contact with the concerned borrowers,” the circular said.
http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=29067&Cat=3&dt=2/3/2011
Posted in: Chitral,NWFP
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