Senate panel approves ‘Netting of Financial Arrangements Bill’
ISLAMABAD: The Senate Standing Committee on Finance and Revenue approved the “Netting of Financial Arrangements Bill,” envisaging strengthening Pakistan’s financial markets, reducing systemic risks, and paving the way for legal recognition and enforceability of netting agreements that are widely used in global financial transactions.
The proposed legislation is aimed at removing legal uncertainty over the settlement of financial contracts during bankruptcy, insolvency, or other termination events, a move expected to deepen domestic financial markets, facilitate the introduction of sophisticated financial products, and enhance the confidence of international financial institutions dealing with Pakistani counterparties.
The panel met on Thursday under the chairmanship of Saleem Mandviwalla and considered the Government Bill “The Netting of Financial Arrangements Bill, 2026”.
During the briefing, representatives of the Pakistan Banks Association informed the Senate body that netting laws are widely recognised internationally and facilitate financial transactions by providing legal certainty in cases of insolvency and by allowing settlement on a net basis under specified financial agreements.
The representatives further informed the Committee that the proposed legislation had been developed following consultations with the banking sector and the State Bank of Pakistan. They stated that the proposed framework would strengthen Pakistan’s financial sector and align it with internationally accepted practices.
Minister for Finance and Revenue Senator Muhammad Aurangzeb informed the Committee that extensive consultations had been undertaken with all relevant stakeholders during the drafting process. Following detailed deliberations, the Committee approved The Netting of Financial Arrangements Bill, 2026.
The proposed law removes any uncertainty in enforcing the netting rights in case of a termination event, bankruptcy, or insolvency proceedings, limits the powers of the liquidators to prevent any cherry-picking of qualified financial arrangements, and allows financial collateral arrangements under such netting rights.
During the discussion on the matter relating to sanctioned and vacant posts in the Benazir Income Support Programme (BISP), Aurangzeb informed the Committee that the Government is digitising all BISP payments to enhance transparency, efficiency, and service delivery. He stated that financial assistance to beneficiaries would be disbursed through digital wallets as part of the ongoing digital transformation initiative.
The Minister further noted that the government is promoting the use of technology across public sector institutions, including BISP, and referred to an unfortunate incident that occurred during the disbursement of BISP payments last year, underscoring the importance of strengthening digital payment mechanisms. Senator Muhammad Talha Mahmood supported the Minister’s position and observed that public sector employment has increasingly become a sought-after opportunity.
Chairperson BISP Senator Rubina Khalid informed the Committee that BISP does not have its own permanent operational workforce and currently relies on officers serving on deputation. She stated that while digital payments are being made through banking channels, the Programme requires dedicated operational staff to effectively manage its expanding responsibilities. She also expressed concern at the suggestion that BISP does not require additional employees, emphasising the operational needs of the Programme.
The Committee held a further discussion on the matter relating to the issuance of revised pay-slips for Directors, Staff and Private Secretaries of the Senate Secretariat, as referred by the Senate Finance Committee. Officials of AGPR briefed the Committee on the matter and requested additional time for implementation. The Committee directed AGPR to resolve the issue within one week. The Committee was informed that the matter would be reviewed again after the stipulated period in accordance with applicable procedures.
The Committee also discussed the issue relating to the salaries of faculty members and professors serving under the Tenure Track System (TTS). After hearing all stakeholders, the Minister of State for Finance acknowledged the importance of providing competitive salaries to faculty members in support of quality higher education while noting that certain issues required further examination. It was decided that the Ministry of Federal Education and Professional Training, the Higher Education Commission, the Ministry of Finance, and the Ministry of Law and Justice would jointly undertake a comprehensive review of the matter and develop a consensus-based proposal.
The Committee also reviewed the matter regarding the grant of an honorarium equivalent to five months’ basic pay for medical staff deputed at Parliament House during the Budget Session 2025. During the discussion, it was observed that the Ministry of National Health Services had included additional names of officers not specifically deputed for duty at Parliament House during the budget session. The Committee directed the Ministry to revise the list by excluding ineligible names to facilitate the early disbursement of the honorarium to the eligible officials.
The Committee received a briefing from the State Bank of Pakistan regarding a complaint submitted by Abdul Razzaq concerning the recovery of funds withdrawn from his UBL bank account through the bank’s mobile application. SBP officials informed the Committee that the matter is currently pending before the Banking Court. After hearing both the complainant and the relevant authorities, the Committee decided to defer further consideration until the judicial proceedings are concluded.
The Ministry of Finance also briefed the Committee on the implementation status of recommendations made by the Senate Standing Committee on Finance and Revenue during deliberations on the Federal Budget 2026-27. The Committee was informed that approximately 43 percent of the recommendations relating to the Finance Bill had been incorporated into the Bill, while 21.6 percent of the Committee’s consolidated recommendations had also been adopted.
Copyright Business Recorder, 2026