Almost a billion dollars loans written off!!!

Although it is a slightly stale news item, given the season of elections and that all parties in Pakistan are vying for power and presenting themselves as the champion of the poor, it may be the right time to analyze this gigantic write-off allowed (Pak Rupee 54 billion – ) and sanctioned by the State Bank of Pakistan  (SBP) under a banking circular to all national banks struggling with these outstanding loans. (

And an interesting fact is……….. there is no… repeat no penalty / black listing / and even naming and shaming of the defaulters.

What makes Pakistan perhaps unique is that there is no bankruptcy law and the authority to write-off a loan rests with the financial institutions who exercise it by simply assuring themselves that the loan is not recoverable. The beneficiaries are often quite thriving and the write-off only adds to their net worth..

I came across a paper submitted by Dr Shamshad Akhtar, Governor SBP at Bank of International Settlements, titled Pakistan – changing economic and social paradigm ( )which states that by writing off a billion dollar worth of loans, the banking industry was restructured and asset quality improved – excellent.. what a way to do it…what a big joke!!! She comes from what .. Asian or World Bank and this is her output… what a shame!!!

The banking industry buoyant on operating at one of the world’s highest margins 9% to 12% (doing no duty to the majority of their depositors) could definitely absorb it but writing off loans of politicians and businessmen several times in the history of this country .. and I mean of the same person / same family …. is definitely no service to the banking industry and no service to the nation.

A total of around 50,000 persons including politicians, civil and military business concerns and business tycoons of Karachi, Lahore and other areas were the direct beneficiaries of this massive favour. 

Those who benefited from the write-off include the Admajee Group, Ghazi Construction and politicians like Balochistan Chief Minister Jam Yousaf and Senate Deputy Chairman Mir Jan Muhammad Jamali. In certain cases, some individuals had taken loans in the name of two or three companies and then had them written-off.


Unfortunately, the government and the SBP both have decided not to disclose the full list of individuals who received the write-offs with details of how many times these individuals and business groups have received write-offs over the last 60 years. There is no Freedom of Information Act…  (On second thought, I think there is.. but when fundamental rights are suspended.. what can we make of this piece of paper which really is a non-issue and when judges who can enforce the law are kept under virtual house arrest, it is just another moot point)

Here are some interesting facts/figures:

  • a sugar mill set up with tax payers money at an estimated cost of Rs.300 million is sold for a token price of one Rupee,
  • the government majority shares in Pakistan’s biggest chain of hotels are dished out free to a crony, by giving him a loan to facilitate the purchase and then writing the loan off,
  • a business shark manages to secure 38 loans totaling Rs 3.5 billion through fake collateral, escapes when found out and is living happily abroad,
  • an unknown entity is granted a loan of Rs. 1.18 billion without any collateral on a telephone call from Islamabad and the banker who sanctioned the loan ends up as a federal minister instead of ending up in prison,
  • all five loans worth Rs.500 million of an enterprising businessman heading FPCCI Committee for Revival of Sick Industrial Units, are written off,
  • 12 foreign currency loans of an industrial tycoon, amounting to Rs. 672 million are converted into a rupee loan and rescheduled so that repayment starts in 2002 instead of 1990. When the matter is raised in the Supreme Court, the tycoon who has expanded his business abroad is granted another loan to repay the rescheduled loan,
  • 80 industrial units including 32 biggest units set up by public and private sector in the last 50 years are sold for a paltry amount of Rs.10 billion. New owners are defaulting in the payment of Rs. 4 billion to the Privatization Commission and liabilities of the privatized units worth tens of billions of Rupees in local and foreign currencies are being paid by the Government of Pakistan, i.e. the tax payers,
  • 1,500 individuals and firms make use of 80 per cent of the total bank credits; Rs. 130 billion are stuck up in bad loans and Rs. 8.2 billion have been written off: while the public demands recovery of stuck up loans, the government has come out with schemes to reschedule the loans and grant new loans to the same defaulters,
  • the common man bears the burden of 100 different taxes prevalent in the country but the super-rich are provided escape routes of exemptions and tax holidays, 180 of them in the payment of income tax alone.
  • (

    An interesting link on google groups kind of rounds up the corruption picture. (

    So now I will end up this post, with the list of 22 families that own Pakistan…. this has been one of the recurring stories over so many generation and I am afraid this list is a bit stale but most of the names and groups are the real beneficiaries of these loan write-offs over the history of this country …. Shame ! Shame ! Shame !


    Name Manufacturing Assets Fianancial Assets (Rs. million)
    1 Nishat 27,792 165,145
    2 Saigol 15,202 9,004
    3 Crescent 10,586 12,353
    4 Dewan 10,113
    5 Ittefaq 10,000
    6 Chakwal 9,264 5,530
    7 Habib 7,612 4,657
    8 Saphire/ Gulistan 7,583 4,657
    9 Gul Ahmad/ Al-Karam 5,220 915
    10 Packages 5,168 12,822
    11 Chakwal 4,592 5,530
    12 Atlas 4,359 2,555
    13 Hashwani 4,251 382
    14 Bibojee-Saifullah 3,806 637
    15 Dawood 3,780 1,605
    16 Monnoos 3,605
    17 Fecto 3,542
    18 Lakson 2,876
    19 Gatron 2,870
    20 Fateh 2,843
    21 Sargodha 2,743
    22 Al-Noor 2,573
    23 Ghulam Farooq 2,465
    24 Ibrahim 2,333 336
    25 United 2,237 3,644
    26 Bawany 2,189 53
    27 Zahoor 2,178
    28 Schon 2,038 2,259
    29 Dadabhoy 2,016 151
    30 Jehangir Elahi 2,038
    31 Fazalsons 2,000
    32 Rupali 1,910 12,833
    33 Servis 1,707
    34 Yunus Bros 1,689 997
    35 Tawkkal 1,678 644
    36 Sitara 1,619
    37 Colony 1,620 94
    38 Premier 1,501
    39 Shahnawaz 1,299
    40 Sunshine/ Sunrays 1,265
    41 Fazal/ Fatima 1,263
    42 Calico 1,235
    43 Tata 1,060 102
    44 Raja 1,020
    45 Nagina 1,013


    This list does not include the Zardaris, Bhuttos, Jatois, Jamalis, Legharis, Bugtis, Mazaris, Zehris and other big feudal families in whose estate even today they say you can walk for days and still be on their estate…….. fascinating but it does make you sad.

    India did its land reforms immediately after partition .. and behold their progress!!!! And Pakistan didn’t … what a Shame!!!


    2 thoughts on “Almost a billion dollars loans written off!!!

    1. Pingback: kelakg » Almost a billion dollars loans written off!!!

    2. No need to comment because the people at the helm of affairs and decison donot bother to read the comments or reports. However it is a shame that if a house building corporation defaulter is cought his house is even auctioned due to his default what a shame. We donot deserve to call our selves civilized nation.

    Leave a Reply

    Fill in your details below or click an icon to log in: Logo

    You are commenting using your account. Log Out / Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out / Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out / Change )

    Google+ photo

    You are commenting using your Google+ account. Log Out / Change )

    Connecting to %s