THE State Bank of Pakistan has reported to the Supreme Court that there have been write-offs of Rs 256 billion granted by the nations banks in the last 38 years, with 640,000 people benefiting from various schemes in this time. According to the counsel for State Bank, the write-offs were perfectly legal, and the money could not be recovered. According to the Report itself, there was no record of Bankers Equity Ltd or Indus Bank write-offs. The Report also said that the loans written off included those advanced to ministers, MPs, bureaucrats, landlords and their families. The State Bank thus confirmed what has already been well known, that the powerful exploited the banking industry after it was nationalised, by borrowing money through the use of political influence, and then using that influence to have a scheme prepared which included a write-off component, and finally having the loan written off. In that way, the banks, which were also exploited for jobs, were milked. The Report quotes the Auditor General as saying that this money came from the public exchequer. This is because the banks, being wholly state-owned, paid their profits to the exchequer. Now, with privatisation, the situation has changed, and any losses due to write-offs, or any other reason, would be the concern of the shareholders. But at the time of the period under Report, the government being the sole shareholder, no questions were asked. Another loss the government had to bear was that the lowered profitability affected the price at which the banks were privatised. As the banking sector has not been wholly privatised, this means exploiting national resources is still open to those in government. The banks raised the issue in meetings with the Finance Ministry and the State Bank, the latest such meeting being in 2007, showing that this was a matter on which banks have long had reservations, but on which the government constantly overruled them. The Supreme Court has adjourned the case, but the matter is not yet over.