NA passes Fi­nan­cial In­sti­tu­tions Bill, 2015

The Pak Banker - - NATIONAL -

The Na­tional As­sem­bly Thurs­day passed the Fi­nan­cial In­sti­tu­tions (Re­cov­ery of Fi­nances) ( Amend­ment) Bill, 2015 paving way to fa­cil­i­tate re­cov­ery process of bank loans. Par­lia­men­tary Sec­re­tary for Fi­nance and Rev­enue Rana Afzal Ahmed on be­half of the Fi­nance Min­is­ter moved the bill to amend the Fi­nan­cial In­sti­tu­tions ( Re­cov­ery of Fi­nances) Or­di­nance,(FIRO) 2001

in the House. The State­ment of Ob­jects and Rea­sons of the bill says the FIRO was pro­mul­gated in 2001, pri­mar­ily to deal with the re­cov­ery process of the bank loans and loan de­faults. How­ever, the apex court de­clared sec­tion 15 of the or­di­nance as ul­tra­vires to the Con­sti­tu­tion on De­cem­ber 10, 2013.

The pro­posed amend­ments are meant to fa­cil­i­tate re­cov­ery process of bank loans so that loan de­faults and in­ci­dence of writ­ten off loans could be min­i­mized. The pe­cu­niary limit of High Court cases is pro­posed to be en­hanced to Rs 100 mil­lion to re­duce the bur­den of cases on su­pe­rior courts. The will­ful de­fault would be an of­fence un­der the or­di­nance. The loans writ­ten off for rea- sons other than merit, would be open to trial at any stage with­out ap­pli­ca­tion of any lim­i­ta­tion, know­ingly sub­mis­sion of false in­for­ma­tion in the court would ren­der the par­ties in­el­i­gi­ble to de­fend the case.

The smooth re­cov­ery process would re­sult in growth of healthy credit cul­ture in the coun­try, re­duce risks of de­fault and writ­ing off of loans and would also cre­ate ad­di­tional funds for lend­ing to new seg­ments of bor­row­ers. The mea­sures taken to­gether would sta­bi­lize the fi­nan­cial sys­tem and con­trib­ute to sus­tain­able eco­nomic growth in the coun­try.

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