Circulars/Notifications  

 BPD Circular Letter No. 8
June 11, 2002  

The Presidents/Chief Executives,

All Banks/NBFIs.

Dear Sir(s)/Madam,

PROCEDURE TO BE FOLLOWED IN ISSUNIG 30 DAYS DEMAND
NOTICE BY THE BANKS, DFIs AND FINANCIAL INSTITUTIONS
TO THE LOAN DEFAULTER –
7 DAYS NOTICE BY THE GOVERNOR, STATE BANK OF PAKISTAN

 

As you are aware the Governor, State Bank of Pakistan has to satisfy himself that the cases referred to him by the banks, DFIs and financial institutions under Section 31-D of the NAB ordinance, 1999 in fact pertain to willful default. In order to assist him in this task the following procedure has been laid down which should be strictly adhered: -

1.                  President/Chief Executive will give his detailed comments with regard to correctness or otherwise of statements contained in reply/ies (if any) (the “Reply”) to thirty (30) day’s Notice given by concerned bank/NBFI pursuant to the first proviso of Section 5 (r) of the NAB Ordinance.

2.                  If no reply to thirty (30) days’ Notice has been given, then President/Chief Executive should give his detailed comments with regard to correctness or otherwise of contentions, if any, earlier raised by or on behalf of the alleged defaulters disputing banks/NBFIs claim in whole or in part.

3.                  If the matter has been subject to negotiations for settlement, it should be confirmed that no settlement has been reached.

4.                  Amount due to bank/NBFI, i.e. defaulted loan, should be clearly and correctly stated.

5.                  If quantum of the amount said to be due is disputed, then President’s/Chief Executive’s views on merits of such dispute should be stated. Further, amount admitted and amount disputed should be separately stated.

6.                  If defaulted loan is subject to litigation/s, then particulars of claims and contentions of the parties and their merits should be furnished.

7.                  It should be confirmed that no order restraining the initiation of proceedings under the NAB Ordinance has been passed by any competent court of law.

8.                  Cases where persons are notoriously known to have defrauded and/or have without any plausible argument deliberately failed to pay amounts due to banks and other financial institutions should be given priority. Before forwarding the case to the Governor, this aspect needs to be examined by President/Chief Executive.

9.                  Procedure prescribed in this Circular should be strictly adhered to in all future cases.

10.              In cases where banks/NBFIs have already requested the Governor to make a reference to NAB, following procedure should be followed: 

(a)          Further letter from President/Chief Executive setting out details as stated in paragraph 1 to 8 above should be sent to the Governor.

(b)         President/Chief Executive should specify cases which are to be given priority on the basis of the criteria stated in this circular. 

11.              Please note that procedure prescribed in this circular letter is in addition to procedures set out in Circular Letter No. 17 dated July 19, 2001 and Letter No. BSD/RU-55/X/NAB/14084/2001 dated October 2, 2001.

12.              Whilst approaching the Governor to make a reference to NAB, President/Chief Executive should expressly and specifically confirm that prescribed procedures as notified from time to time have been strictly followed.

Please acknowledge receipt.


Yours faithfully,
(Najib Nasir Syed)
Joint Director

BPD Circulars/ Circular Letters issued in 2003
 


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