The State Bank of Pakistan (SBP) on Wednesday mentioned a few things regarding the topic of written-off loans, stating that it has never refused to give details to the Parliament in this regard.
According to SBP, the information on forgiven loans was always available publicly since its mandatory for banks to do so. The names of the persons and the amounts written off is always revealed.
The Senate had recently demanded information about the names of the borrowers of Rs5 million or more who obtained loans from a bank during the last 5 years. They also needed information regarding the number of cases where debts were either recovered or waived off.
However, SBP responded that none of the loans were waived off by the bank out of the loans of Rs5 million or more disbursed during the time period of last 5 years.
Furthermore, information about the number of loans disbursed by the bank during the last five years and recovery of loans was also provided to the Senate in consolidated form, but the names of individual borrowers of the bank, who availed loans during the last five years and write offs involved in these cases were not shared because of the legal provisions of Section 33-A of the Banking Companies Ordinance-1962 and Section 9 of Protection of Economic Reforms Act 1992 which disallow the sharing of customers’ personal information.
Section 33-A of the Banking Companies Ordinance, 1962 titled as Fidelity and Secrecy states that:
“Every bank and financial institution shall, except otherwise required by the law, observe the practices and usage customary among bankers and, in particular, shall not divulge any information relating to the affairs of its customers except in circumstances in which it is, in accordance with the law, practice and usage customary among bankers, necessary or appropriate for a bank to divulge such information”.
Meanwhile Section 9 of Protection of Economic Reforms Act 1992, titled Secrecy of banking transaction, states that secrecy of bonafide banking transaction shall be strictly observed by all banks and financial institutions, by whosever owned, controlled or managed.
SBP wishes to make it clear that it respects the need and importance of transparency in its affairs and stands ready for any accountability by the representatives of the public in Parliament.
Via BusinessRecorder
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