Shahid Nasim, Executive Director, Securities and Exchange Commission of Pakistan Tuesday said that the existing Modaraba Ordinance was proposed to be repealed and replaced with a comprehensive modern and all-inclusive piece of legislation.
Speaking at the launching ceremony of the seventh year book of NBFI &Modaraba Association of Pakistan and distribution of best performance awards here, he said the new law would include comprehensive provision prohibiting the use of word "Modaraba" or derivatives and raising of deposit by unregistered entities and the offence is cognisable by NAB/FIA; empowerment to the certificate holders of Modaraba, including the concept of AGM; establishing unlisted Modaraba with mandatory condition of listing within three years; introduction of concept of performance based share of profit of the Modarib and reducing the time frame for circulation of annual accounts time period from six months to four months.
Shahid Nasim distributed the performance awards to top three Modarabas namely First Imrooz Modaraba, First Habib Modaraba and ORIX Modaraba and congratulated them on their achievements.
Earlier, Ayaz Dawood, Chairman, NBFI &Modaraba Association of Pakistan said that Non-Banking Financial Institutions including Modaraba and Leasing Companies play a vital role in broadening the access to the financial products and services by extending supplementary support to the overall banking system. He highlighted the activities of the Leasing and Modaraba Sectors during the current year and presented statistics and trends indicating their performance. The dividend distribution of Modarabas to over 80,000 share holders was also highlighted.
Basheer A Chowdry, CEO Trust Modaraba while thanking the Chief Guest for attending this event said that though regulatory vision and policy matters shared by SECP have provided an insight into the regulatory regime of NBFIs and Modaraba Sectors, the future of investment banks, leasing companies and Modarabas will depend on a very supportive regulatory environment. The most important issue of NBFIs and Modarabas, he emphasised, was the resource mobilization to increase their funding and operational base by supplementing their equity with deposits, debt instruments and credit lines without which the sector will not be able to participate fully in the growth opportunities of the economy.