Law Approved to Let Banks and Businesses Settle Pending Dues Without Lawsuits
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The National Assembly Standing Committee on Finance has approved two key government bills, including the Netting of Financial Arrangements Bill 2025 and amendments to the Fiscal Responsibility and Debt Limitation Act, in a meeting chaired by Naveed Qamar.
The Netting of Financial Arrangements Bill 2025 will apply to agreements between banks and the corporate sector, allowing parties to settle mutual obligations by adjusting outstanding amounts. Officials from the State Bank of Pakistan told the committee that the law will enable structured agreements for loan settlement and improve financial efficiency.
Under the proposed framework, both parties in a financial contract will be able to offset dues against each other at the time of settlement. The committee was informed that the law would also reduce prolonged disputes, which often remain unresolved due to stay orders.
Officials said that in case of disputes, the law will introduce an arbitration-based mechanism to resolve issues more efficiently. Minister of State for Finance Bilal Azhar Kayani said the move would strengthen the financial system and improve contract enforcement.
On the fiscal side, the committee also reviewed amendments to the debt limitation law. Officials briefed that under existing legislation, public debt should not exceed 60 percent of GDP, while the current level stood at 69.9 percent last year.
The Finance Ministry told the committee that efforts are underway to reduce the debt burden, adding that the country is currently running a primary surplus despite fiscal pressures. It was also noted that reforms have extended the maturity profile of domestic debt beyond the earlier average of two years and six months.
Committee members raised concerns over repeated breaches of the legal debt limit and lack of parliamentary oversight. The chairman directed that quarterly reports on public debt should be regularly presented before parliament to ensure transparency and accountability.
