The State Bank of Pakistan has advised banks and development finance institutions (DFIs) not to enter into agreements with the wilful defaulters whose cases are pending with the National Accountability Bureau (NAB).
The SBP in a circular issued on Tuesday said that some of the financial institutions, after forwarding the cases of their wilful defaulters to NAB through the SBP, enter into agreement with the borrowers for settlement of outstanding liabilities, without obtaining prior consent of NAB.
The practice on the part of financial institutions renders the whole exercise futile.
"It has been advised that financial institutions should not enter into any agreement with the borrowers in the cases which have already been referred to NAB by SBP Governor," said the circular.
The financial institutions have been told not to enter any agreement, in such cases, without obtaining prior written permission or clearance from the NAB.
With regard to cases, which have been forwarded to SBP and are still in the process of referring the same to NAB, the financial institutions should first withdraw their such request or cases from SBP before entering into settlement agreement with borrowers.