Islamabad
The National Assembly Standing Committee on Finance and Revenue expressed serious reservations over proposed indemnity provisions and extensive legal protections being extended to financial institutions and their officials under the proposed amendments to “The Financial Institutions (Recovery of Finance) Amendment Act, 2026.”
Chairman of the Committee, Syed Naveed Qamar, observed that “boilerplate clauses” granting blanket immunity under the umbrella of “good faith” should not become a routine feature of legislation. He emphasized that legal protections must apply equitably to all parties and should not be extended in a one-sided manner.
The Committee meeting, held at Parliament House, conducted a detailed clause-by-clause review of the proposed amendments with particular focus on the newly introduced Section 15A concerning housing finance and foreclosure procedures.
During deliberations, members expressed concern that the proposed foreclosure mechanism, if enacted without adequate safeguards, could become unduly stringent and disproportionately burdensome for borrowers and ordinary citizens.
The Committee stressed that while financial institutions require legal mechanisms for the recovery of defaulted loans, the legislation must ensure balance, fairness, and adequate safeguards for borrowers. Members called for meaningful remedies and appellate protections to prevent misuse of powers and arbitrary foreclosure actions.
Lawmakers also voiced broader concerns regarding the increasing trend of granting sweeping powers to institutions without corresponding accountability mechanisms.
The Committee directed the concerned ministry and stakeholders to incorporate the agreed amendments and observations into a revised draft for further consideration. The minutes of the previous meeting held on May 7, 2026, were also approved.
The meeting was attended by Dr. Nafisa Shah, Ms. Hina Rabbani Khar, Dr. Mirza Ikhtiar Baig, Mr. Muhammad Jawed Hanif Khan, Mr. Arshad Abdullah Vohra, and Ms. Shahida Begum, MNAs, along with the State Minister for Finance and Revenue, Secretaries of Finance and Law and Justice, and senior officials of the Finance Division and the State Bank of Pakistan.
