A welcome decision

The Supreme Court, which has been seized of the practice of massive write-offs of bank loans relating to the period from 1971 to December 2009 in the country, has taken a very serious view of it, and directed the State Bank of Pakistan to ensure their recovery at all costs. And in case of the failure of loan defaulters to pay back, prescribed strict measures to punish them. In compliance with the SC’s order at an earlier hearing of this case, the central bank had produced on Wednesday a list of 50 top defaulters, hardly any of whom could be termed insolvent. In fact, in most cases, their enterprises, boosted by the infusion of money they received under these loans, have flourished by leaps and bounds. The total amount they owe to the various banks is of the order of Rs 250 billion.
The measures that the three-member Bench, headed by Chief Justice Iftikhar Chaudhry, asked the SBP to adopt, are: issue notices to the defaulters mentioned in the list; auction their properties; put their names on the ECL; advertise their names in the media; and if even then they do not return the loans, send them behind bars. These steps, no doubt, suggest that the court is uncompromisingly serious in their recovery. The prevailing situation in the country, when the institutions charged under the law with the task of watching the financial interests of the people and the country, are found wanting, judicial activism – the apex court had taken a suo moto notice of the widespread practice of writing off loans – is greatly welcome. The truth also is that deliberate defaults have been part of the loot and plunder that has been raging in the country with greater force with the passage of time. – nation