LAHORE : Free access to the accounts of bank depositors is in fact an addition of new criminal sanctions by the FBR in finance bill, allowing reckless misconduct by the officials as well as senior bankers, which will never help promote economic growth or guarantee to achieve revenue collection, warns the experts of banking laws. The new criminal ‘reckless misconduct’ offence is currently being debated in the financial regulatory authorities and prosecuting agencies.
They said that efforts to introduce new criminal sanctions, including an offence of ‘reckless misconduct in the management of a bank’ which carries a custodial sentence, needs legislative changes to radically reform the banking industry.
Law society Executive Secretary Intazar Mahdi said the experts are concerned about the unfortunate and unintended consequences of the reforms being introduced in banking laws.
‘Introducing recklessness as the basis for an offence means that prosecutors will have to decide, possibly years after a business decision was taken, whether it was reckless or not.’ At a time when growth is vital for the Pakistan economy, it’s important that we get the balance right between ensuring adequate risk control and stimulating business’.
He argues the prospect of facing criminal sanctions may deter experienced, well-qualified candidates from taking up senior positions. This could lead to struggling banks facing a vacuum of quality leadership at a time when they most need it.
The Society also argues that it would be quicker, more transparent and more effective if relevant authorities use the full range of regulatory measures coupled with civil remedies to ensure irresponsible individuals cannot continue to work in the industry.