Interior minister Moinuddin Haider told Pakistan Television on Tuesday that plans were being finalised to come down hard on the defaulters, as banks reported settlements of under Rs 3 billion against an outstanding Rs 200 billion in unpaid dues.

The government is also giving final touches to a law that will give it greater powers to attach property and nab defaulters. The four-week period within which all loans and dues were to be repaid to Pakistani government expired at the close of banking hours on Tuesday.

In October, shortly after overthrowing Pakistan's elected government in a military coup, General Pervez Musharraf announced November 16 as the deadline by which debts owed to the government wereto be repaid, after which the government will implement strict debt-collection measures. The government's aim was to recover as much as possible of the more than 200 billion Pakistani rupees that organisations and individuals owe the government and public sector banks. Tuesday morning, local media reported that five major public sector banks have recovered under PKR3 billion in cash so far.

Most of the outstanding loans were granted by successive governments as political favors and were never paid back. One of the major defaulters is former Prime Minister Nawaz Sharif and his family, who owe the government over PKR12 billion in defaulted loans.

Musharraf, Pakistan's chief executive, has said the recovery of this ``national wealth'' is his first priority. Individuals and organisations who owe PKR10 million or more have been placed on the Exit Control List. Pakistanis whose names appear on this list are barred from leaving the country. The army has stepped up checks at airports and on sea routes to ensuredefaulters do not escape the country. On Wednesday, Finance Minister Shaukat Aziz will preside over a ``post-deadline meeting'' in Islamabad, where a strategy will be finalised to recover outstanding debts by foreclosing on property and arresting defaulters.

As a consequence of the government's debt collection drive, prices of property, luxury cars and gold have fallen locally.

``There is very little demand. And many people are now selling these items so that they can get some cash to pay off the government,'' saiys a Karachi realtor. Salahuddin Haider, a leading realtor in Karachi.

Under the new laws soon to be promulgated, defaulters will face stiff prison sentences, and property which is believed to be theirs, regardless of under whose name it is, will be repossessed.