Islamabad: Chief Justice of Pakistan Iftikhar Muhammad Chaudhry has said that banks could not be given discretionary powers to write off loans.
A larger bench of the SC headed by the CJ was hearing a suo motu case pertaining to Rs 256 billion written-off loans.
The SBP submitted alternative law in place of circular 29 in the court which was approved by the court. According to the circular scrutiny commission headed by Justice (r) Jamshed Ali would decide the written off loan cases. . The CJ directed the banks to cooperate with the commission. . The SC was assured that the SBP governor would issue new circular till Friday.
It was agreed in the court that the commission would decide the cases pertaining to loans written off by the banks form 1971 till to date.
The Cj remarked that loans of influential people are written-off over a phone call. He ruled that Section 25 AA of the Banking Ordinance was not followed in writing off loans.
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