ISLAMABAD: The federal government on Friday introduced, "The Modaraba Companies and Modaraba (Floatation and Control) (Amendment) Bill 2020" in the National Assembly to provide incentives to entrepreneur and prospective investors to invest and carry out their businesses under the umbrella of regulated structure of Modaraba to earn halal profits on their investments.
Minister for Power Omer Ayub introduced, "The Modaraba Companies and Modaraba (Floatation and Control) (Amendment) Bill 2020" in the House. National Assembly Speaker Asad Qaiser referred the bill to the relevant Standing Committee of the house for further deliberation.
According to objects and reasons of the bill, it focuses on the growth of the modaraba sector through introduction of various reforms such as the concept of establishment of unlisted modaraba, empowerment of the certificate holders through introduction of the concept of annual general meeting to ensure maximum participation of certificate holders in decision making process of a modaraba, and providing enabling environment for ease of doing business.
It will facilitate the growth of economy in general and the Islamic financial sector in particular by providing simplified procedures for ease of starting and doing business, greater protection of investors and augment corporatization in the country. The proposed bill seeks to mitigate the reputation and operational risks and enhance the image and operational framework of modaraba as a pure Islamic financial institution of the country. The bill aims to enhance SECP oversight and bring operational flexibilities for modaraba sector.
The purpose of the bill is to amend more than 40 years old ordinance and regulate the business of modaraba and modaraba companies to provide protection to the investors, modaraba certificate holders and public.
The existing Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980 was promulgated by the federal government in 1980. Since its inception, no substantial changes have so far been introduced except inclusion of some administrative powers for the commission and the registrar modaraba in the year 2012.
Copyright Business Recorder, 2020
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