{"id":1048,"date":"2026-05-14T01:50:27","date_gmt":"2026-05-14T01:50:27","guid":{"rendered":"https:\/\/dailypakistannews.com\/?p=1048"},"modified":"2026-05-14T01:50:27","modified_gmt":"2026-05-14T01:50:27","slug":"na-body-concerned-at-proposed-indemnity-protections-for-fis","status":"publish","type":"post","link":"https:\/\/dailypakistannews.com\/?p=1048","title":{"rendered":"NA body concerned at proposed indemnity, protections for FIs"},"content":{"rendered":"

ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue expressed serious concerns regarding the proposed indemnity provisions and the extensive protections being extended to financial institutions and their officials in the proposed \u201cFinancial Institutions (Recovery of Finance) Amendment Act, 2026\u201d.<\/strong><\/p>\n

The committee met on Wednesday with Syed Naveed Qamar in the chair for a detailed clause-by-clause review of the proposed amendments to \u201cthe Financial Institutions (Recovery of Finance) Amendment Act, 2026,\u201d with particular focus on the newly introduced Section 15A concerning housing finance and foreclosure procedures.<\/p>\n

Chairman Syed Naveed Qamar expressed serious concerns regarding the proposed indemnity provisions and the extensive protections being extended to financial institutions and their officials. He categorically observed that such \u201cboilerplate clauses,\u201d which grant blanket immunity under the umbrella of \u201cgood faith,\u201d should not become a routine feature of legislation.<\/p>\n

The Chairman further emphasized that legal protections must either apply equitably to both parties or not be extended in a one-sided manner. Other committee members endorsed the viewpoint of the committee chairman, while saying that indemnity should be provided equally to both sides or not to any side. The Ministry of Law assured the committee of creating a balance in this regard.<\/p>\n

During the deliberations, the Committee engaged in an extensive discussion on the proposed foreclosure mechanism under housing finance arrangements. Members expressed deep concern that, if enacted without adequate safeguards, the proposed legal framework could become unduly stringent and disproportionately burdensome for borrowers and ordinary citizens.<\/p>\n

The Committee emphasized that while financial institutions required legal mechanisms for recovery of defaulted loans, the legislation must also ensure balance, fairness, and adequate safeguards for borrowers. Members stressed the need for meaningful remedies and appellate protections to prevent misuse of powers and arbitrary foreclosure actions.<\/p>\n

During the discussion, members also raised broader concerns over the increasing trend of granting sweeping powers to institutions without corresponding accountability mechanisms.<\/p>\n

The proposed amendment\/ new insertion 15A (18) noted that no suit, prosecution, or other legal proceedings shall lie against any financial institution or any of its officers or managers exercising any of the power conferred under this section for anything done or intended to be done in good faith.<\/p>\n

The proposed amendments further included that where a customer defaults in the payment of the mortgage money under a housing finance, the financial institution may send a first notice in writing to the mortgagor, demanding payment of the outstanding mortgage money within a period of not less than thirty days from the date of service of such notice. If the mortgagor fails to make payment within the stipulated period, the financial institution shall, upon expiry of that period, serve a second notice in writing upon him, demanding payment within a further period of not less than thirty days from the date of service thereof; and if the mortgagor continues to remain in default, upon expiry of the period specified in the second notice, the financial institution shall serve a final notice in writing upon the mortgagor, demanding payment of the outstanding mortgage money within a period of not less than thirty days from the date of service of such final notice.<\/p>\n

Provided that at any stage before the sale of the mortgaged property, the financial institution may, in its discretion and on such terms and conditions as it may deem appropriate, enter into an arrangement with the mortgagor for the rescheduling, restructuring or settlement of the outstanding mortgage money, and upon such arrangement being duly agreed, the financial institution may suspend or withdraw any notice issued under this sub-section, subject to compliance by the mortgagor with the terms of such arrangement.<\/p>\n

It further noted that when a financial institution serves a final notice of demand under sub-section (2), all powers of the mortgagor regarding recovery of rents and profits from the mortgaged property shall stand transferred to the financial institution until such notice is withdrawn and it shall be the duty of the mortgagor to pay all rents and profits from the mortgaged property to the financial institution: Provided that where the mortgaged property is in possession of any tenant or occupier, other than the mortgagor, it shall be the duty of such tenant or occupier on receipt of notice in this behalf from the financial institutions to pay to the financial institutions the rent or lease money or other consideration agreed with the mortgagor.<\/p>\n

The committee also raised questions on the sole discretion of banks, as well as the option of buying by banks at a 10 percent higher value.<\/p>\n

Copyright Business Recorder, 2026<\/p>\n","protected":false},"excerpt":{"rendered":"

ISLAMABAD: The National Assembly Standing Committee on Finance and Revenue expressed serious concerns regarding the proposed indemnity provisions and the extensive protections being extended to financial institutions and their officials in the proposed \u201cFinancial Institutions (Recovery of Finance) Amendment Act, 2026\u201d. The committee met on Wednesday with Syed Naveed Qamar in the chair for a […]<\/p>\n","protected":false},"author":0,"featured_media":1049,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pakistan-news"],"_links":{"self":[{"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=\/wp\/v2\/posts\/1048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1048"}],"version-history":[{"count":0,"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=\/wp\/v2\/posts\/1048\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=\/wp\/v2\/media\/1049"}],"wp:attachment":[{"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailypakistannews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}