Financial Institutions Amendment Bill 2026 authorizes banks to take possession of borrower’s property in case of default.
The National Assembly Standing Committee on Finance has approved the Financial Institutions Amendment Bill 2026.
The National Assembly Standing Committee on Finance has approved the Financial Institutions Amendment Bill 2026, under which the powers of banks against loan defaulters have been increased.
During a briefing in the meeting chaired by Syed Naveed Qamar, officials said that in case of default, banks will be able to take possession of the borrower’s property. According to the proposed law, the bank will issue three notices to the defaulter within 90 days, while the borrower will be able to make arrangements for payment during this period and submit a written request to the concerned bank within 30 days.
According to the bill, property obtained under house finance will not be allowed to be rented out to a third party. Officials said that if the property is already leased, this matter will also be resolved according to the law.
In the meeting, committee members expressed reservations on various points. Javed Hanif Khan said that publishing the defaulter’s name and address in the newspaper is against human dignity, while Sharmila Faruqi said that it is being portrayed as if all people are criminals.
Ministry of Law officials stated that publishing names and addresses in newspapers is already part of the existing legal procedure. In the meeting it was said that authority has been given for property possession through the Deputy Commissioner, however some members also raised objections to this.
Committee Chairman Naveed Qamar said that giving the Deputy Commissioner or banks authority equivalent to courts is not appropriate. The committee suggested that in case of disputes regarding leases, the Deputy Commissioner should first determine the reasons, after which a decision should be made.
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