The Presidents/Chief Executive Officers

All Banks/DFIs

Dear Sir/Madam,

WRITING OFF OF IRRECOVERABLE LOANS AND ADVANCES

1. Please refer to BPRD Circular No. 06 of 2007 dated 05-Jun-07.
2. We have received representations from the banks/DFIs seeking explanation on the said circular. In order to ensure uniform practices across the industry fostering availability of accurate and reliable information to the stakeholders, it is clarified that:

1. Write off includes any form of relief allowed to the customer in terms of dues outstanding towards the bank/DFI, including principal, markup/profit and other charges.
2. For the purpose of reporting in e-CIB of SBP, to reflect actual position of write off and recovery, netted balance of write off (principal, markup/profit and other charges) shall be updated as and when recovery is made.

3. Meticulous compliance with the above instructions shall be made; any violation will attract punitive action under the Banking Companies Ordinance, 1962.
4. Please acknowledge receipt.