1- Please refer to BPD Circular Letter No. 12 dated April 26, 2004 and BPD Circular Letter No. 36 dated October 9, 2004 on the captioned subject.

2- It has been observed that after proceedings are initiated by NAB against borrowers/defaulters upon reference by Governor SBP under Section 31-D of NAO, financial institutions enter into settlements with the borrowers/defaulters without obtaining any NOC/consent from NAB. This practice renders NAB proceedings futile, results in wastage of time and other resources and is a violation of SBP instructions.

3- Therefore, henceforth, while requesting Governor SBP for reference against willful defaulter to NAB under Section 31-D of NAO, financial institutions shall include a certificate duly signed by their President/CEO, declaring that the financial institution would not enter into any settlement/rescheduling agreement with the borrower without prior written consent of Chairman NAB.

4- All other instructions on the subject shall however, remain unchanged.

5- Please acknowledge receipt.