The Presidents/Chief Executives,

All Banks/DFIs

Dear Sirs / Madam,

Reference against Willful Defaulters under Section 31-D of National Accountability Ordinance, 1999 (NAO)

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.