Financial Institutions (Recovery of Finances) Bill, 2016 also sails smoothly through Senate
The Senate has approved the Securities and Exchange Commission of Pakistan (Amendment) Bill, 2016, already approved by the National Assembly along with further amendments earlier in May.
The Senate also passed the Financial Institutions (Recovery of Finances) (Amendment) Bill, 2016 paving way to facilitate recovery process of bank loans.
The Securities and Exchange Commission of Pakistan (Amendment) Bill, 2016 will facilitate better superintendence and control over capital and financial services market, corporate sector and insurance industry bringing the SECP on par with its international counterparts in the capital markets of the world.
The new law is aimed to cover all the deficiencies and shortcomings in the existing law. The SECP succeeded the Corporate Law Authority (CLA) in 1999 as a unified regulator of the capital markets and for superintendence and control of corporate entities. However, its mandate has continued to be enhanced through various amendments, such as floatation, management and regulation of modarabas (1999), insurance sector (2000), non-banking financial companies sector (2002), commodity futures market (2003), real estate investment trusts (2008), etc.
FINANCIAL INSTITUTIONS (RECOVERY OF FINANCES) BILL, 2016:
Minister for Law and Justices Zahid Hamid on behalf of Minister for Finance and Revenue Mohammad Ishaq Dar moved the Financial Institutions (Recovery of Finances) Bill, 2016, to amend the Financial Institutions (Recovery of Finances) Ordinance, 2001 in the House.
The Statement of Objects and Reasons of the bill says the Financial Institution (Recovery of Finance) Ordinance (FIRO) was promulgated in 2001, primarily to deal with the recovery process of the bank loans and loan defaults. However, the Supreme Court declared section 15 of the ordinance as ultra vires to the constitution on December 10, 2013.
The State Bank of Pakistan (SBP) initiated the process of consultation among the relevant stakeholders to frame the amendments in the FIRO. In light of the judgment of the Apex Court and requirement of the Financial Institution the Financial Institutions (Recovery of Finances) (Amendment) Bill, 2016 has been drafted.
The proposed amendments are meant to facilitate recovery process of bank loans so that loan defaults and incidence of written off loans could be minimised. The pecuniary limit of the High Court cases has been proposed to be enhanced to Rs 100 million to reduce the burden of cases on superior courts.