Federal government has decided to broaden the scope of Corporate and Industrial Restructuring Corporation (CIRC), and draft amendment already approved by the cabinet in this regard will soon be presented in the parliament for its final approval.
"If this amendment becomes part of the CIRC ordinance after approval of the parliament, private banks could even approach CIRC through State Bank of Pakistan (SBP) for disposal of their non-performing portfolios," said CIRC Chief Executive Officer (CEO) Javed Hameed while addressing a press conference here on Tuesday. Member Banking CIRC, Naeemuddin Khan and others were also present on this occasion.
Throwing light on the proposed amendment, Javed said it would enable CIRC to carry out its revival exercise in relation with all financial institutions operating in Pakistan.
Earlier CIRC was authorised to acquire NPLs of only those financial institutions in which government had 85 percent shareholding. A particular need for these amendments was felt due to disinvestment/privatisation carried out by the federal government in HBL, UBL, and ABL and merger of NDFC and NBP, which resulted into exclusion of these financial institutions from the ambit of special CIRC legislation, he said.
He further stated that the CIRC had accomplished acquisition of 69 non-performing assets (NPAs) of HBL immediately before HBL's privatisation with an outstanding amount of Rs seven billion.
CIRC is in process of acquiring about 21 NPA's of HBL with an outstanding amount of Rs 2.3 billion, he added.
In the past, CIRC carried out a similar exercise on the merger of NDFC with NBP and privatisation of UBL.
In the former case, 44 NPAs were acquired for an outstanding amount of Rs 7.7 billion against consideration of Rs 278 million while in the later case, 62 NPA's were acquired for an outstanding amount of Rs 26 billion against consideration of Rs four billion.
Throwing light on performance of CIRC, he stated that during last three years from its inception in September 2000, CIRC has made recoveries of over Rs 3.5 billion from the non-performing loans acquired from various banks through disposal of sick industrial units to the new entrepreneurs and direct settlements.
As many as 22 units, out of total 88 units settled by the CIRC, had either become functional or partly ready to go into operations.
This process has helped creating 30,000 direct and indirect jobs, he added.
He said that through settlement of these units, CIRC has made a surplus of Rs 694 million.
He also disclosed that the CIRC had auctioned six units in the month of December 2003. Next board meeting of the CIRC is expected to be held on January 15 at Islamabad in which board would study cases of 15 units, in which outstanding amount of Rs 2.3 billion is involved, he added.
He said that CIRC had planned to offer five units per month for auction. He also contradicted a news item that in acquisition of HBL NPAs, CIRC would suffer loss of Rs 800 million.
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