Please refer to SMEFD Circular No. 01 dated February 02, 2011 in terms of which guidelines were issued regarding Write-off of Loans in Malakand, Swat, Buner and Chitral Districts under above Fiscal Relief Package of the Government of Pakistan.

2.            Now Finance Division, Government of Pakistan, has informed that Prime Minister has approved to extend the facility of writing off of total loans outstanding as on 31-12-2009 to the residents of Lower Dir, Upper Dir, and Shangla Districts of Malakand Division under the subject Fiscal Relief Package.

3.            Accordingly, Banks/DFIs/MFBs may write-off the outstanding loans as of December 31, 2009 of the borrowers of Lower Dir, Upper Dir, and Shangla Districts as per guidelines given in SMEFD Circular No. 01 dated February 02, 2011.  

4.            Banks, DFIs and MFBs shall bear the cost of such write offs to the extent of amount held into provision against NPLs and interest in suspense account, while the rest of the cost will be paid by the Government of Pakistan as subsidy.

5.            After internal approvals to write off of outstanding loans of the borrowers of Lower Dir, Upper Dir, and Shangla Districts under Fiscal Relief Package of the Government, the banks/DFIs /MFBs may submit claims to the office of SBP-BSC (Bank), Peshawar on prescribed format (copy attached) duly audited and authenticated by their Internal Audit, up-to April 10, 2012 at SBP-BSC (Bank), Peshawar.

6.            The amount to be reimbursed by SBP-BSC (Bank), Peshawar shall, however, be subject to on-site inspection by SBP’s Inspection Department and if any amount claimed found ineligible, the same shall be required to be refunded by the concerned institutions along-with a fine of 25% of amount reimbursed.

7.            Other instructions on the subject shall remain unchanged.

Encl: As above