20000116

Corporation to take

over non-performing

banks' assets in the offing

ANWAR RAJANI

KARACHI: A new corporation is in the offing to take over non-performing assets (sick units) of banks and DFIs.

The corporation is being set up on pattern of the Resolution Trust Corporation working in the United States. Headed by Tariq Hameed, it will consist of chairman of the Privatisation Commission, two representatives of private sector, one of the high officials of the State Bank of Pakistan, and two high officials of the federal government.

The corporation will revive the sick units or make arrangements for change of hands in these units.

There are 500 sick units. Of these, 60 percent belong to textile sector.

According to informed sources, the corporation will issue bonds to banks and DFIs for the sick units. The bonds will be encashed by banks and DFIs after a time to be fixed by the corporation.

This corporation was on the cards during the period of the last caretaker government but it could not take off due to some bureaucratic snags.

Sources said that this corporation will be successful particularly in case of the textile units because, according to them, the textile industry at present is booming.

About four sick textile units have changed hands recently in the arrangement made by DFIs and they attracted very good prices.

The new corporation is expected to take a final shape very soon.