We have the requisite legal expertise and acumen to advise our clients on Shari’ah compliant Islamic Banking. It has the capability to prepare transactional documentation for Islamic Banking and the Firm is frequently advising different banks and financial institutions on legal issues arising out of Shari’ah compliant transactional work. We are also one of the few legal firms in Pakistan capable of handling both litigation and non-litigation work in the Banking Sector. The Firm has represented banks in numerous of cases at various courts at all jurisdictional levels in Pakistan.
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The information provided below is meant for the purposes of helping our current and potential clients.Please note that while we keep every effort to update the information on our Website, we are not responsible if any new law or amendment has been ignored in the paragraphs below.This information is also not a substitute for actual legal advice by our Specialist team.If you have a legal query, we would recommend you to get in touch via free consultation.
Advice on corporate governance includes but is not limited to situations involving takeovers tenders, revising equity and debt capital and act for/on behalf of underwriters and issuers. The issue corporate governance can become complex especially when foreign equity is involved. We help our clients but letting them set up and structure the appropriate form of business and in establishing or restructuring corporate entities. An array of specialized legal services are offered in relation to diversified categories of work, the list being innumerable include; securities, capital market, insurance, non banking finance companies, corporate finance, corporate governance, stock exchanges, investment, mercantile, registration of companies, winding up or liquidation of companies, legal due diligence (with focus on enterprise risk management).
Our law firm regularly advises international banks and other financial institutions, focusing mainly on banking and financial crimes. We have ample experience of litigation and in-house legal advisory in the following areas:
- Breach of the terms of an instrument or document whereby possession of any asset or property offered as security for the re-payment of finance
- Fraudulent misrepresentation made to a financial institution.
- Dishonest alienation of mortgaged property.
- Offences under the jurisdiction of Special Court (Banking Offences)
- Loan Transactions And Related Security (Particularly Guarantees)
- Swaps And Derivatives
- Pertinent Aspects Of The Law Of Insolvency
- Receivership And Company Law
- Constructive Trusts And Tracing Of Assets
- Letters Of Credit
- Performance Bonds
- Letters Of Comfort
- Bills Of Exchange
- Corporate Finance
- Project Finance
- Short Term And Long Term Financing And Bridge Financing
- Letters Of Credit
- Restructuring Of Loans
- Revival Of Sick Units Etc.
- Project Finance
- Securitization And Other Structured Finance.
- Secured and unsecured loan transactions
- Participation arrangements
- Provision of Comprehensive legal audits and due diligence services.
- Asset Securitization and Term Finance Certificates and their private placement or public issue.
- Securities offerings, debt restructuring, and loan workouts on a corporate or nation wide scale
- Financial Institutions (Recovery of Finances) Ordinance 2001
- The State Bank of Pakistan Prudential Regulations relating both to Banking as well as Non-Banning Financial Institution
Background on Banking law in Pakistan
In the decade of the 1990’s Nationalised Pakistani banks were denationalised (through amendment in the Bank Nationalization Act ) by sale of shares and transfer of management to private sector bidders and/or employees. Government also allowing applications, in accordance with certain criteria, to set up new commercial banks including with foreign participation. Investment banks also allowed to be set up with foreign participation.
In the Pakistani banking sector, one of most important developments has been the completion of process of legislation for its structural reform. State Bank of Pakistan Act, Banks Nationalization Act, and Banking Companies Act, were amended further and new recovery law under name of Financial Institutions (Recover of Finances) Ordinance 2001 was legislated.
Subsequently, changes in the State Bank Act gave full and exclusive authority to State Bank to regulate banking sector, to conduct independent monetary policy and to set limit on government borrowings from State Bank of Pakistan. In significant development, State Bank of Pakistan (SBP) has recently been bifurcated. Under SBP Banking Services Corporation Ordinance 2002, SBP Banking Services Corporation has been set up to perform all non-core functions of SBP. SBP transfers to new corporation all such agreements and contracts, deeds and bonds, powers of attorney, letters of credit, guarantees and legal representations that have been established in its favour or to which it has been party. Bifurcation allows SBP to perform core job of central bank, such as formulating following monetary policy, regulating and supervising banks, managing debt and foreign exchange reserves etc., more efficiently.
Microfinance Institutions Ordinance 2001 has been enacted to provide organizational, financial, and infrastructural support to poor people especially women; to relieve poverty; and to promote social welfare and economic justice through establishment of company that would accept deposits from public for purpose of providing above services. By Companies (Second Amendment) Ordinance 2002 non-banking finance companies may be established, which may carry out investment finance services, leasing, housing finance services, venture capital investment, discounting services and asset management services, etc.
Amendments in Banks Nationalization Act abolished Pakistan Banking Council and institutionalized process of appointment of Chief Executives and Boards of nationalized commercial banks and development finance institutions with State Bank having role in their appointment and removal. Amendments also increased autonomy and accountability of Chief Executives and Boards of Directors of banks and development finance institutions.
The recovery law in Pakistan is designed to ensure expeditious recovery of stuck up loans and to speed up court proceedings for loan recovery decrees and their implementation. Full and effective implementation of these laws would improve health and viability of banking sector, which is critically needed for efficient financial intermediation in context of increasing integration of economy of Pakistan with world money and capital markets. However, in recent decision, full bench of Lahore High Court has struck down § 15 of Financial Institutions (Recovery of Finances) Ordinance 2001, declaring it repugnant to fundamental rights enshrined in Arts. 2-A, 3, 4, 9, 23, 24, and 25 of Constitution. Consequently, financial institutions stand barred from disposing of mortgaged properties of defaulters without obtaining court order.