Islamabad, July 11, 2014 (PPI-OT): Finance Minister, Senator Ishaq Dar chaired a meeting for resolution of SBP credit line issue with House Building Finance Corporation Limited (HBFCL) and ZTBL at the Finance Ministry today.
The Finance Minister was informed that HBFCL owes Rs.13.2 billion since 2006 and the institution is not been able to clear its overdue credit line. It may be mentioned that neither HBFCL is doing any business for the last many years nor been able to recover loans from the defaulters. Whereas salary bill is consuming whatever meager earning they have in the form of repayment of house building loans.
The Finance Minister was further informed that ZTBL owes Rs.93.2 billion (principal Rs.54.5 billion, mark up 38.7 billion) to the State Bank of Pakistan and for the last 15 years, the credit line has not been cleared. Poor balance sheet of ZTBL has hampered its progress and financial standings.
The Finance Minister said that it is very unfortunate that both these important financial institutions have poor balance sheets and were not performing upto the expectations. He said that agriculture credit and sustainable agricultural growth are the government’s budget strategy preferences.
Number of new initiatives have been announced in the budget to boost agriculture sector. On the other hand, house building industry is also an important catalyst for economic turnaround in the country. He said that in line with the priorities of the political leadership of the country, the government would like to strengthen both the institutions so that they can aggressively market their products, provide facilities to farmers and ordinary people for house building.
The Finance Minister and all the three major stakeholders viz SBP, ZTBL and HBFC unanimously decided to convert their loans into equity at par and for immediate payment of interest by HBFC to SBP. The Finance Minister while addressing the management of the both ZTBL and HBFC emphasized that they have to start a new beginning with new management and boards to aggressively market their products and a task force should be formed for recovery of non-performing loans.
He said that expectations from new management are that they would strengthen both the institutions and to reform and restructure the institutions with the objective of making them vibrant financial institutions with robust balance sheet.
It was further decided that all legal, corporate and administrative requirements will be completed by 21st of July 2014 subject to approval by the SBP Board of Directors in order to resolve this 15 years old outstanding issue which was hampering the performance of both the critically important financial institutions.
The meeting was also attended by Governor State Bank, Ashraf Wathra, Finance Secretary, Dr. Waqar Masood, Chairman SECP, Mr. Tahir Mahmood, President ZTBL, Mr. Talat Mehmood, MD HBFC, Mr. Pervaiz Saeed, Advisor to the Finance Ministry, Rana Assad Amin, Additional Finance Secretary/SA to Finance Minister, Mr. Shahid Mahmood and senior officials of the Finance Ministry.
For more information, contact:
Haji Ahmed Malik
Principal Information Officer
Press Information Department (PID)
Tel: +92-51-9252323 and +92-51-9252324
Fax: +92-51-9252325 and +92-51-9252326