The Cabinet in its meeting on Friday approved initiation of winding up of the Industrial Development Bank of Pakistan (IDBP) along with its liquidation. The Cabinet meeting was held under the chairmanship of Prime Minister Yousuf Raza Gilani. It agreed in principle to start negotiations on various agreements with six countries.
Minister for Information and Broadcasting Dr Firdous Aashiq Awan gave a briefing to media persons at the end of Cabinet meeting. She said that the report of corporatisation and restructuring of IDBP was put up in the meeting to get facilitation from the government. Ministry of Finance and State Bank of Pakistan (SBP) briefed the Cabinet about the finding of a committee constituted to look into the affairs of IDBP.
Minister for Information said, "Cabinet, considering the court cases and report, decided that IDBP will be privatised and the process of loans recovery from the defaulters will be expedited". The report was submitted before the Cabinet by the State Bank of Pakistan as convenor of the committee to fix responsibility on the persons who caused losses to the bank because of imprudent lending and writing off loans during the period 1971 to 2009.
The committee selected 38 out of 647 write-off cases amounting to Rs .8 billion that covers 58 percent of written-off amount during the said period. Out of the selected 38 cases 15 were settled through corporate and Industrial Restructuring Corporation.
The focus of report was mainly on the written-offs under various categories including incentives and settlement schemes introduced by SBP and the federal government from time to time. Some of which were initiated for the revival of sick industries. The committee identified and informed the Cabinet in its report of the various reasons and problems resulting in bad loans and substantial write offs of the sample cases.
The Cabinet was informed that restructuring decision of IDBP was taken in 2003. Although SBP had recommended its liquidation but no decision had been taken so far and the losses of the bank are increasing with each passing day. The Cabinet also approved to initiate agreements with other foreign countries along with ratification of an investment treaty.
In principle, the government agreed to start negotiations between Pakistan and South Africa on the agreement for establishment of joint commission. The government will also negotiate with Afghanistan on an agreement on mutual legal assistance in criminal matters.
The government will start negotiation with Jordan for visa abolition agreement for diplomatic and official passport holders and negotiation with Uzbekistan on agreement on transfer of offenders. The Cabinet also approved ratification of MoU with Turkey in the field of maritime co-operation signed during Prime Minister''s visit to Turkey and initiating negotiations on agreement on promotion and protection of investment with Hungary.
The information minister said that with the devolution of federal ministries to provinces, relevant funds, loans and grants for public sector development projects were transferred to provinces. Fate of these development projects would now be decided by provinces, she added.
She further remarked that it had been brought to the notice of federal government that Punjab would not come up with any strategy about development projects. "Despite receiving financial resources allocated for ministry of population, the government of Punjab did not clear six months salary dues to transferred employees of ministry", she said.