Home » News » Finance » CIRC turns down fresh valuation request

CIRC turns down fresh valuation request

LAHORE, Aug 1: The Corporate and Industrial Restructuring Corporation (CIRC) is said to have refused to carry out fresh valuation of the projects whose owners wish to settle their loans with the corporation under the scheme offered by it in the latter half of May.

“Our projects are in the possession of the CIRC for quite some time. There have since been thefts of machinery and other assets. Therefore, the previous valuation carried out by the banks or the CIRC itself does not hold. We have asked the corporation to carry out fresh valuation of our project but it has declined to do so,” said a defaulter whose request for the same has been turned down.

The person, who asked not to be named, said the “CIRC had told him that he had got to settle his (non-performing) account on the basis of the previous valuation.” The corporation would not agree on any amount that was less than the one for which it had assumed the project from the bank, he said and added it was precisely why its officials had declined fresh valuation.

About 77 defaulters whose cases are with the CIRC for disposal have shown their interest for settling their loans in response to the corporation's invitations for the same.

The CIRC, according to its officials, was asked to initiate “a loan write-off scheme” on May 15 on the lines of the State Bank's guidelines on the write-off of irrecoverable loans/ advances given to banks on October 15 to clean up their books. The CIRC was told to invite defaulters whose NPAs it had assumed from the banks for settlement by June 30 – the last date for applying with any bank under the central bank's guidelines on write-off of irrecoverable loans/advances.

The person said: “he did not know who to turn to for a decision on what he termed as a dispute between him and the corporation.”

“The SBP has formed a dispute resolution committee, comprising bankers and businessmen, to settle disputes arising between banks and borrowers in the implementation of the loan write-off scheme. But there is no forum for the settlement of such disputes between the CIRC and borrowers,” he said.

He urged the “SBP to look into the matter and tell the federal finance ministry which controls the CIRC working to either set up a powerful committee for the resolution of such disputes or allow the central bank's dispute resolution committee to decide them.”

When contacted, no senior CIRC official was available for his comment. But a middle level CIRC official conceded that “such disputes had arisen, and would crop up in future as well, because the CIRC was not prepared to allow fresh valuation of projects in its possession”. “You know, the value of such projects, which are closed for some months or years, would keep depreciating with the passage of time. If borrowers want to settle their accounts, they must agree to pay according to the last valuation at which we had acquired their projects from the banks,” he added.

At present the CIRC, which came into being in the last quarter of 2000, is in possession of some 171 non-performing accounts (NPAs) with an outstanding liability of Rs40.987 billion. Of them 163 NPAs with an outstanding amount of Rs19.88 billion are stated to be eligible for disposal by the CIRC under its ordinance.

Leave a Reply