Senate Committee chaired by Senator Saleem Mandviwalla approves major amendments to banking legislation

ISLAMABAD, August 28 (SABAH): The Senate Standing Committee on Finance and Revenue convened on Wednesday at the Parliament House under the chairmanship of Senator Saleem Mandviwalla.

Attendees included Senators Mohsin Aziz, Syed Faisal Ali Subzwari, Manzoor Ahmed along with senior officials from relevant departments.

The committee reviewed and passed the “Deposit Protection Corporation Amendment Bill, 2024.” Deputy Governor of the State Bank, Dr. Inayat Hussain, provided a detailed briefing on the bill. Under the new amendment, depositors will receive legal protection for amounts up to Rs 500,000, an increase from the previous limit of Rs 250,000. Dr. Hussain noted that while microfinance banks are not currently included in the bill, future amendments may extend protection to them as well. He also reported that the IMF has advocated for enhanced depositor protection.

Dr. Hussain revealed that board members of the State Bank earn Rs 75,000 per meeting, while other banks charge fees exceeding Rs 50,000. Senator Mohsin Aziz highlighted that such financial incentives contribute to the attraction of jobs in the banking sector.

The committee also examined “The Banking Companies (Amendment) Bill, 2024,” which includes provisions for Islamic banking. Dr. Hussain emphasized that Islamic banking in Pakistan adheres to strict regulations compared to global standards, and noted that the IMF advocates for a unified regulatory framework for commercial and microfinance banks by December.

Senator Mandviwala raised concerns about joint investment companies from foreign countries investing in government papers and urged the Finance Ministry to address this issue. Additionally, he advocated for a ban on such investments to prevent external influence on domestic markets.

The committee also discussed discrepancies in Islamic banking practices, with Chairman Mandviwala alleging that profit rates in Islamic banking can exceed those in conventional banking. He requested a detailed briefing on Islamic banking practices from the State Bank.

The Senate Committee approved both the Deposit Protection Corporation Amendment Bill, 2024, and the Banking Companies Amendment Bill, 2024. The meeting concluded with a call for greater transparency and regulatory oversight in Islamic banking.