The Standing Committee on Finance and Revenue has expressed strong reservations about proposed legal protections that could grant blanket immunity to banks and their officials, warning that such measures must not become a legislative default. Chairman Syed Naveed Qamar told members that protections framed as “good faith” must not create one-sided shields that leave borrowers vulnerable.
The committee assembled at Parliament House for a clause-by-clause review of amendments to the Financial Institutions Recovery of Finance Amendment Act, with particular scrutiny on the newly added Section 15A covering housing finance and foreclosure procedures. Members described the proposed foreclosure mechanism as the most sensitive element under consideration.
While committee members acknowledged the need for effective tools to recover defaulted loans, they warned against recovery powers that could be exercised arbitrarily or harshly against ordinary citizens, especially those facing temporary financial hardship. The focus on housing finance raised concerns that unchecked foreclosure powers could place undue pressure on borrowers.
Chairman Qamar specifically objected to broad indemnity language and boilerplate clauses that offer extensive protection under the banner of “good faith.” The committee emphasised that any grant of blanket immunity should be carefully limited and accompanied by clear accountability measures, remedies and appeal rights for affected borrowers.
Members urged that the revised recovery framework include meaningful legal protections for citizens and an accessible process for redress. The committee directed the relevant ministry and stakeholders to incorporate the agreed amendments and observations into the draft before the bill proceeds for further consideration, underscoring the need for balance between institutional recovery powers and borrower rights.
