LAHORE -  In an interest-based global economy, Pakistan’s banking system offers unique opportunities of ‘interest-free loans’ to scores of influential business groups and individuals.

Not that the loans are initially sanctioned free of interest, the accumulated mark-up can be waved at a later stage in many cases if one has got the right connections.

This is the message one gets from Punjab Law Minister Rana Sanaullah’s statement made in the Punjab Assembly yesterday.

He was presenting an official defence of Bank of Punjab’s decision to write off loans amounting to Rs 1575.617 million in favour of different companies and individuals in the last eight years.

According the law minister, it was a normal practice in commercial banks to give concession on the mark-up as well as the principal amount to improve recovery of loans.

He further stated that different banks in Pakistan had waived Rs 35 billion in respect of mark-up on loans and Rs 30 billion on account of principal amount in the last eight years.

He argued that out the total Rs 1575.617 million waived by the BoP, a major chunk of Rs 1470.537 million was the accumulated mark-up on loans while the principal amount involved in this case was only Rs 105.080 million.

So the bank had actually waived the mark-up and not the principal amount in most of the cases, he said.

He pointed out that there were only five cases in which the BoP had waived the principal amount which was nominal compared to the mark- up. 

Making a comparison, he said that other banks had waived Rs 30 billion principal amount of loans whereas the BoP had written-off only Rs 105.080 million.

Opposition leader Mian Mehmoodur Rashid had asked the Minister through an adjournment motion to come up with an official explanation of BoP’s decision to write-off loans in favour of 167 influential persons and groups.

The Speaker silenced the Opposition leader when he rose to respond to the Law Minister. It followed rumpus in the House.

Though a serious mood prevailed in the House for most part of the proceedings, the legislators did share some moments of joy on Friday. Exactly at the time when the Speaker started taking up adjournment motions, Punjab Minister for Industries Sheikh Alauddin set his foot on the Assembly floor. The lawmaker from Kasur has the distinction of being the only member in the House who moved maximum number of adjournment motions in the last eight years. As he took seat close to the Opposition benches, some PTI members quipped: “Sheikh sab pass on your adjournment motions to the Opposition members since you cannot move them after becoming Minister”.

He smiled and uttered a few words not audible in the Press gallery. This was in fact a cross talk not permitted under the Assembly rules, but the Speaker ignored it as he would do quite often.