Reservations on amendments in BCO
In the year 2009, National Assembly passed “Banking Companies (Amendment) Bill, 2009” in which a couple of amendments were made in “Banking Companies Ordinance, 1962” (BCO) regarding the shareholding rights of a member of a banking company which SBP can reduce, divest or transfer to a fit & proper person, whereas, the second amendment was regarding the restrictions as to the payment of dividends i.e. the SBP may restrict or prohibit any banking company from paying dividends to its shareholders for a specified period.
ROLE OF THE PASSAGE
To establish that such shifts in the policies would negatively affect the banking industry of Pakistan, The Passage started a campaign which helped bring into limelight that such a drastic law has never existed in the past and unheard of in the entire world. The Passage also emphasized on the ambiguity of the amended bill, establishing that while drafting the proposed amendments no regulation or law had been cross referred and had been done in haste since many terms in the same were vague in the absence of the defined criteria and such amendments would give State Bank of Pakistan unprecedented and extensive discretionary powers, which can be used arbitrarily against interest of shareholders which would result in demotion of investment in Pakistan.
As a result of continuous efforts by The Passage, the governor of State Bank of Pakistan resigned from his position and the proposed amendments in the bill were not implemented.