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What happened there? NDFC

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    What happened there? NDFC

    For several weeks, I didn't check out the Pakistani newspapers (online or otherwise), and a couple of days back when I checked Dawn, there was a news item about "Govt allowing withdrawls of Rs 100K from NDFC" and that folks are pretty upset with the state of affairs etc etc.

    I tried back issues but couldn't turn up anything. So, I was wondering if any of you knows more about this. NDFC is/was one of Pakistan's premier financial institution with lots of deposit holders, a large stake by the government and loads of loans (good and bad).

    Did NDFC went belly up? Their bad portfolio finally caught up with them so they have refused to pay back their deposit-holders?

    At this point I don't know much, so any help (news, opinions, URLs) will be most welcome.

    Thanks.

    #2
    From The News International

    SBP allows big withdrawals from NDFC

    By our correspondent

    KARACHI: The State Bank of Pakistan has allowed NDFC deposit holders to withdraw a maximum principal amount of Rs 250,000, with immediate effect. The amount would be in addition to the accrued profit up to Aug 27. "Now even those who have anything above Rs 250,000 can also withdraw; no matter how big the deposit is," an SBP spokesman said.

    "This was decided in a meeting held on Thursday at the SBP head office under the chairmanship of the Governor, State Bank of Pakistan, Dr Ishrat Husain, and attended by the Chairman, NDFC, Badruddin Khan, and officials of the State Bank," a SBP statement said.

    It may be recalled that earlier individual depositors having deposits up to Rs 100,000 in NDFC were allowed to withdraw the principal amount with effect from Sept 5. After Thursday's decision, 28,000 out of a total of over 39,000 individual depositors, will fully recover their deposits with the NDFC.

    The remaining 11,000 depositors would also be allowed to withdraw Rs 250,000 from the outstanding balances in their accounts. They will be able to draw another Rs 250,000 from the 3rd week of next month. Meanwhile, the governor State Bank of Pakistan in an interview with PTV said the decision to merge the NDFC with NBP had been taken in the larger interests of the country and the depositors.

    He said the central bank was committed to strengthen the financial sector in the country. "For this, we have to take some hard decisions to weed out the weaker and unviable institutions so that the depositors' money remains safe and secure in the hands of strong banks and institutions."

    The defaulters and the corrupt officials of the NDFC would be taken to task. However, all other staff of the NDFC would be offered a Golden Handshake Scheme on very attractive terms, he continued. Meanwhile, a wave of happiness pervaded among the employees of the NDFC on listening the surety from the SBP governor that they would be offered Golden Handshake instead of previous rumors of just a severance package, which includes the usual gratuity and provident fund, according to the numbers of years of work.

    ________________

    I think it sounds like a BAILOUT by the State Bank. It looks like financial Mismanagement played a Role in this decision.

    Comment


      #3
      Yeah, I read that... and I was wondering when did this happen. Do you know of any previous links/URL's?

      Seems the govt merged NDFC with NBP, effectively killed NDFC. More seriously, the deposit-holders are not given their money back as promptly as one would hope. That is why we read that upto 100K were allowed 2 days back and 250K were allowed today.

      What happened? What precipitated this collapse?

      We, the Pakistani, were ruining the finance companies, the Taj Companies, the Co-operatives etc etc... and now, this very own government-owned and government-run entity has folded. How did it happen?

      Comment


        #4
        http://www.google.com/search?q=cache...Pakistan&hl=en

        Dont tell me youve seen this one as well lol! Have you tried all the archives of smaller online pak journals?

        Comment


          #5
          No, I hadn't seen it. Thanks. However, it had no dates.

          If you know the search engines which I should use for this, let me know. I'll appreciate it.

          I usually only go to the websites of major newspapers, Dawn, Jang etc and try out their back-issues. Unfortunately none of them have search facility (or if there is, I am not aware of it).

          I am just trying to get the original news-story when NDFC froze its deposits and its merger with NBP was announced.

          Thanks

          Comment


            #6
            Date was :Tuesday, July 31, 2001 PK

            The best search engine to use is www.google.com

            You could also goto http://faridi.net/news/ (faridi site) He has hundreds of links. Sorry Pak.org! lol!

            Comment


              #7
              Ok, found it.. here is the answer I was looking for

              http://www.dawn.com/2001/08/29/top4.htm

              And it was approx Aug 28-30 (and not end of July) when this all was announced.

              I am sure these are extremely miserable times for the deposit-holders of NDFC. Millions of people have their hard-earned savings invested there. Much of it lost due to corrupt management. And its not that these were private swindlers a la cooperatives, or Taj company or finance companies... This was a government guaranteed entity.

              Very sad. Truly shocking!

              Comment


                #8
                The date of that article was July 31st! I wasnt refering to when NDFC announcement was made.

                Anyway, I think problams with NDFC have been known for some time. Not End of AUG which you think ! Go through some of the links !

                Comment


                  #9
                  Ah well, maybe I didn't make myself clear. I was looking for the announcement which stopped NDFC from working (effectively freezing the deposits). That announcement was made on August 28, 2001.

                  And yes, I know NDFC's finanial woes. I carried out the audit of their financial statements in 1996 (for the year ended December 31, 1995). They were pretty bad at that time. Seems like it just went from bad to worse, and no serious effort was made to rectify the situation. Awaam ka paisa hai, loot lo jitna loot saktay ho sorta mind-set. Pathetic.



                  [This message has been edited by Pristine (edited September 07, 2001).]

                  Comment


                    #10
                    And the problem is National bank itself is not in a good shape, some of its branches have been closed down in the past year or so. Li don't know if people will ever get their full amount back, though this is what is being said in Khabarnama that they will but i doubt it and even if they do how long it will take no one knows.
                    I know the stories of "big shots" taking millions and millions as loan from NDFC. Ofcourse, when u get a loan at the Prime minister's phone call u don't give it back and the sufferers as always r the people.
                    This is sad but true.

                    ------------------
                    Dhondo gey humein mulkon mulkon
                    milney key nahi, nayab hey hum
                    We don't forget...its' just that life goes on!

                    Comment

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