ISLAMABAD: The National Assembly, Friday, passed “The Deposit Protection Corporation (Amendment) Bill, 2024” to enhance the mandate of the DPC from “Pay-box only” to “Pay-box plus”, and “The Establishment of Special Court (Overseas Pakistanis Property) Bill, 2024” to solve the cases of immovable properties and assets of overseas Pakistanis within 90 days by a special court.
Minister of State for Finance, Revenue and Power Ali Pervaiz Malik presented, “The Deposit Protection Corporation (Amendment) Bill, 2024” in the house for passage, which was passed with majority.
Minister for Overseas Pakistanis Chaudhry Salik Hussain tabled, “The Establishment of Special Court (Overseas Pakistanis Property) Bill, 2024” for passage. The House also passed it with majority.
However, these two bills have already been passed by Senate and referred to the National Assembly for passage.
The objects and reasons of “The Deposit Protection Corporation (Amendment) Bill, 2024” state, “For the sake of stability of financial system, the bank resolution and recovery regime in Pakistan is being further strengthened.
Resolution of financial institutions often depends upon a sound and reliable funding mechanism in order to enable the Resolution Authority to prepare and execute an effective resolution scheme that would be able to bridge any gaps in assets and liabilities of a non-viable bank.
Preferably, such funding mechanism should be independent of exchequer funds so that taxpayers’ money may not be needed for banks’ resolution except under extreme circumstances. For this purpose, the funds held by a deposit insurance agency can be used for providing financial support.
Such support by deposit protection agency is conceptually similar to the protection provided to depositors, in case of bank failure, as in both cases the funds provided by the deposit protection agency is used to protect depositors’ interest and contribute towards financial system’s stability.”
“The amendments in the Deposit Protection Corporation (DPC) Act, 2016 are aimed at enhancing the mandate of the DPC from ‘Pay-box only’ to Pay-box plus’; i.e., to facilitate in the resolution of its member institutions. For the purpose, proposed amendments in the Act particularly envisage: (i) clearly mentioning in the objectives of the Corporation the enhanced role of fund contribution by the Corporation for resolution; (ii) Inclusion of micro finance banks in DPC’s ambit; (iii) Outlining Corporation’s business and functions in line with the enhanced role; (iv) funding arrangements in case of shortfall of funds; (v) Declaration of bank failures; (vi) Priority of claims of the Corporation with respect to funds contributed in resolution and depositor reimbursement; (vii) Financial support for resolution and related terms and conditions and modes of such support, and (viii) Protection of actions taken by the ‘Corporation and its officials in good faith and their indemnity.”
The Establishment of Special Court (Overseas Pakistanis Property) Bill, 2024 provides facility to the overseas Pakistanis to file petition online.
According to clause 9 of “The Establishment of Special Court (Overseas Pakistanis Property) Bill, 2024”,“(1): The special court shall pass a judgment as expeditiously as possible but not later than ninety days from the date of grant of application for leave to defend.
(2) In case the proceedings are not completed within ninety days, the respondent may be required to furnish security in such amount as the special court deems fit, and on failure, of the respondent to furnish security the special court shall pass judgment.
(3) The requirement of furnishing security under sub-section (2) shall be dispensed with, if in opinion of the special court on appreciation of material available on record, the delay is not attributable to conduct of the respondent. (4) At any time during the course of proceedings, the special court shall not allow adjournment for more than seven days.”
Copyright Business Recorder, 2024
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