Banking, Finance, and Securities Law

Banking refers to the process of accepting, lending, investing money for and from the general public. Banking, finance, and securities law is a rather strenuous, time consuming, and complicated branch of the legal profession, and typically has a lot of money involved. Hence, why it is always a better idea to trust a legal expert with your banking matters.

What are the laws that govern and regulate banking, finance, and securities in Pakistan?

They are plenty of laws that govern and regulate these three disciplines in Pakistan; however, the main and most used laws are provided below:

  • Financial Institutions (Recovery of Finances) Ordinance, 2001

  • Banking Companies Rules (Different for each province)

  • Banking Companies Ordinance, 1962

  • Banks (Nationalization) Act, 1974

  • National Accountability Ordinance, 1999

  • National Bank of Pakistan Ordinance, 1949

  • Bank of Punjab Act, 1989

  • Bank of Khyber Act, 1991

  • Sindh Bank Act, 1995

  • Islamic Development Bank Ordinance, 1978

What is finance?

The following are known as finance:

  • Credit facility

  • Loan

  • Advance

  • Bill

  • Benami loan

  • Any amount due to a financial institution

What can be done if a customer or financial institution commits a default?

If a customer or financial institution commits a default then the aggrieved party can file a suit under section 9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001 in the Banking Court.

Do I need to get my finance agreement attested? How to attest a finance agreement?

A finance agreement issued by a financial institution and customer should be attested according to Article 17 of the Qanun e Shahadat Order, 1984.

Can a bank buy or sell goods or engage in any trade?

Yes.

How can a financial institution sell or engage in any type of transfer of property?

This can be done by way of inviting sealed tenders through advertisement in an Urdu and English newspaper each. The newspapers should be those which are circulated at a wide level in the city where the transfer of property shall commence.

What are approved securities?

It is a type of security in which a trustee can invest money for purposes approved by the Federal or Provincial Government.

Where can I lodge banking complaints?

Your first banking complaint is to be lodged at the complaint cell or your bank. If you fail to get a response and/ or a relief within 45 days then you can file a complaint with the Banking Mohtasib Pakistan (BMP).

Why should I lodge my complaint with the Banking Mohtasib Pakistan (BMP) instead of filing a suit in a competent court of law?

The Banking Mohtasib Pakistan (BMP) is an institution that deals with banking, finance, and securities related matters and dispute. This forum will resolve your matter or dispute in a timely and efficient matter. You should choose this forum over a legal suit so you get a speedier redressal for your grievance without breaking your budget. You do not even need to hire a lawyer to represent your case in front of the Mohtasib (also known as Ombudsman).

Can I obtain a stay order from the Banking Mohtasib Pakistan (BMP)?

No, this forum does not have the jurisdiction to grant a stay order. For this purpose, you will have to file an application of Order 39 Rule 1 of the Code of Civil Procedure, 1908 in the competent court of law.

What does the Banking Mohtasib Pakistan (BMP) deal with?

The BMP deals with the following issues:

  • Discriminatory and Arbitrary Actions

  • Banking Malpractice

  • Operational Issues

  • Perverse

  • Operational Inefficiency

  • Harassments in recovering loans

  • Violation of laws and regulations (banking)

  • Nepotism

  • Corruption

  • Maladministration

 

Is the order of Banking Mohtasib Pakistan (BMP) appealable?

Yes, the appeal against the orders of BMP lies to the President of Pakistan within 30 days of passing of that order.

 

What type of complaints does State Bank of Pakistan (SBP) entertain?

State Bank of Pakistan (SBP) mainly deals and entertains complaints on the following issues:

  • Prize Bonds

  • Currency

  • Microfinance banks

  • Disbursement of pension

  • Utility bills

  • Other matters that require speedy resolution

 

What type of complaints does State Bank of Pakistan (SBP) not entertain?

SBP does not deal or entertain complaints on the following issues:

  • HR matters of banks

  • Matters pending at a law enforcing agency or competent court of law

  • Personal property disputes

  • Undocumented disputes or claims

  • Anonymous complaints

Can I obtain an order from the State Bank of Pakistan directing a bank to provide me loans and/ or advances?

No, the State Bank of Pakistan does not have the jurisdiction to pronounce such an order directing other banks to provide loans and/ or advances.

 

Can I seek financial and/ or legal advice from the State Bank of Pakistan?

No, the State Bank of Pakistan do not provide such services.

Can I seek compensation or claim damages from the State Bank of Pakistan for the wrongdoings of other banks?

No, however, if you want to seek compensation or claim damages then you must file a suit against the concerned bank in a competent court of law.

 

How can a Pakistani residing abroad record their grievance against any bank operating in Pakistan?

Any grievance of a Pakistani residing abroad, against a bank operating in Pakistan can be recorded at the OPF (Overseas Pakistani Foundation). These complaints and grievances are sent to the State Bank of Pakistan and resolved in a timely and efficient manner.

 

Can deposits be made in the name of a minor?

Yes, however, the legal guardian of that minor will be the one receiving and dealing with such a deposit.

 

What happens to the refund where the person claimed it has died?

The claims which are below the amount of 1 lac rupees shall be provided to the legal heirs of the deceased person. However, for claims exceeding that amount a succession certificate is to be obtained from the competent court of law.

Caution: 

Information contained in the above FAQs is for general understanding purposes only and may have altered or have become incorrect owing to variation in factual aspects and evolving laws, therefore, should not be treated as an alternate to professional legal advice.