Pakistan saves $54m default loan

ISLAMABAD (Reuter): Pakistan's Federal Investigation Agency (FIA) said yesterday it had recovered two billion rupees (US$54 million) from loan defaulters in the past month.

FIA Assistant Director General Rehman Malik told reporters loan repayments had picked up recently, citing this as evidence that the campaign against big defaulters was working.

Malik said several bankers and businessmen had been arrested on charges of fraud, embezzlement and default in recent months.

Loan recoveries amounted to two billion rupees in cash and assets seized by the FIA, Malik said.

On Oct. 13 the FIA secured the extradition of a former vice- president of state-owned United Bank Ltd from Dubai who was charged with misappropriating 500 million rupees, he said.

Malik said the Pakistan Banking Council had set up a special account to hold money recovered by the FIA. Creditors would be repaid from that account.

Pakistani banks have huge portfolios of bad debts estimated to total more than 120 billion rupees.