The fate of bank loan defaulters in the past four decades will be decided by the Supreme Court, SBP Governor Yaseen Anwar revealed on Thursday.

The State Bank of Pakistan (SBP) will only provide the most recent data on defaulters to the Election Commission of Pakistan for scrutiny of candidates, Anwar said while briefing the Senate Standing Committee on Finance over the SBP’s role in the verification of candidates’ data before the upcoming polls.He went on to add that the country’s central bank will only provide information about those defaulters whose names appear on the Central Information Bureau list, which is regularly updated by inputs from all other banks.

He, however, added that some of the banks, for instance the National Bank of Pakistan, were not online, which may cause delays in the provision of timely information sharing.Anwar said the matter of past loan defaulters lay with the Supreme Court completely and the SBP was keen to study recommendations of the Justice Jamshed Ali Commission on past loan defaulters.The apex court had formed the commission in March 2011 after taking suo motu notice of borrowers who had taken loans but later managed to get them waived off.

On Wednesday, the parliamentary panel issued directives to make the Justice Jamshed Commission report public, which pertains to those who got their banks and financial institutions to waive off loans from 1971-2010.The ECP is in the process of disqualifying those who failed to meet their financial obligations in the past and has vowed to stop them from taking part in upcoming general elections.

However, Anwar clarified that if a bank enters into a resettlement with a borrower, this will not be classified as default. The write-offs under various revival packages and the ones endorsed by the Board of Directors of the banks will also be decided by the apex court in light of the Justice Jamshaid Commission Report, he added.Economic conditionsWhile speaking on the current economic conditions, the SBP governor said the country was facing many challenges due to uncertainty on political and economic fronts.

However, he gave assurances that the foreign currency reserves were sufficient to return the International Monetary Fund’s (IMF) loans till June this year. He claimed despite the upcoming $400 million payment to the IMF, there will not be additional pressure on the reserves as the central bank was making efforts to keep the reserves at reasonable levels.

He said to offset the pressure on reserves there was a need to review the possibility of controlling unnecessary imports. Anwar said more than one-thirds of the imports were of oil and a change of $5 in crude oil price results into $750 million additional annual payments. He said, “According to our assessment, oil prices will remain stable in the short-term”.The central bank governor said the SBP has tightened currency speculators but the rupee was still under pressure due to lower interest rates, depleting foreign currency reserves and higher inflation.

“There cannot be lower interest rates and strong currency at the same time. It’s a trade off between the both,” he explained. “If the interest rates are increased by 3% today, the rupee will be strengthened (against the US dollar).”