SC hears SBP's Circular 29 case

ISLAMABAD: Chief Justice of Pakistan (CJP) Iftikhar Muhammad Chaudhry said that the taxpayers' money is being abused by writing-off loans.

The money then is used to run big industries and businesses while common man's home is auctioned if he defaulted, the CJ observed.

The Supreme Court last Thursday directed the counsel for State Bank of Pakistan (SBP) to seek instruction from concerned quarters over its observations as to how bank loans were waived off recently despite lapse of Circular 29 in 2003, issued under Section 33 of the Banking Companies Ordinance 1962, and which had been instrumental in writing off loans of Rs 256 billion from 1971 to 2009.

A three-judge bench comprising Chief Justice Iftikhar Muhammad Chaudhry, Justice Muhammad Sair Ali and Justice Ghulam Rabbani questioned how banks waived off loans of billions of rupees recently while knowing well that the matter was pending with the apex Court.

The CJ remarked that business community was respectable and Circular 29 was never questioned because it was used but for the first time its legality has been challenged.

The hearing was adjourned till tomorrow.