SBP not empowered to decide on service matters of bank employees: LHC

LAHORE: The Lahore High Court (LHC) has held that the State Bank of Pakistan (SBP) has no jurisdiction to decide on service matters of bank employees.

The court said power of the State Bank provided in section 41 of the Banking Companies Ordinance, 1962, to give directives is not applicable to service matters of bank employees.

The court passed the order in a petition of Ms Asma Abdul Waris who sought direction to the SBP to decide her representation. The petitioner also challenged the decision of a single bench of the LHC.

LHC rejects PEEDA Act; reinstates BoP employee

The court held that where a jurisdiction is not vested by law, the courts would not ordinarily confer the said jurisdiction on any authority as the same could not be conferred by consent of the parties.

The appellant’s counsel contended that State Bank had jurisdiction to entertain appeal in terms of Section 11 of the Banking Companies Ordinance, 1962.

The petitioner’s counsel also claimed that the SBP had entertained and decided some cases of similarly placed persons.

The court said Section 11 of the Banking Companies Ordinance, 1962, does not relate to the service matters of employees of banks or their cases about terms and conditions of service and termination, consequently the reliance of the counsel for the appellant on the said section is misplaced.

According to the court, the impugned order passed by a single bench is in consonance with the law on the subject and no illegality, jurisdictional defect or misreading of record has been pointed out to warrant any interference in the order in question.

Asma Abdul Waris joined the United Bank Limited as a branch manager on April 1, 2017. She was promoted as vice president in March 2022, but her promotion was withheld due to an ongoing inquiry about opening of fake bank accounts and she was terminated from service.

The petitioner made representations to the respondent to exercise its powers for her reinstatement; however, the respondent did not exercise its powers. The appellant sought direction to the State Bank of Pakistan to decide her representation.

Copyright Business Recorder, 2023