National Assembly Passes Banking and Airports Reform Bills

The National Assembly of Pakistan has approved the Financial Institutions (Recovery of Finances) Amendment Bill, 2026 and the Pakistan Airports Authority (Amendment) Bill, 2026, introducing legislative reforms aimed at strengthening loan recovery mechanisms and restructuring the governance framework of the Pakistan Airports Authority.

Both legislative measures were presented separately before the lower house and subsequently passed through majority voting procedures.

According to the statement of objects and reasons accompanying the Financial Institutions (Recovery of Finances) Amendment Bill, 2026, the proposed amendments are intended to reinforce Pakistan’s legal and institutional framework governing recovery of banking finances and enforcement of mortgage-related rights.

The bill introduces procedural reforms designed to improve transparency, expedite recovery proceedings, and safeguard the interests of bona fide leaseholders, while also restricting potential misuse of injunctive remedies before Banking Courts.

Under the proposed framework, financial institutions will additionally be empowered to seek assistance from relevant authorities for obtaining possession of mortgaged properties. The amendments further provide legal immunity for actions carried out in good faith and prescribe enhanced penalties for specified violations under the law.

The government stated that the reforms are intended to establish a balanced framework protecting the rights of both lenders and borrowers while improving recovery rates for defaulted loans and strengthening Pakistan’s broader credit and banking environment.

Separately, the Pakistan Airports Authority (Amendment) Bill, 2026 seeks to align the authority’s administrative and legal structure with institutional changes introduced after the Aviation Division was merged into the Defence Division in February 2025.

The amendments provide for inclusion of an additional senior officer from the Defence Division on the Pakistan Airports Authority Board.

The bill also introduces an emergency decision-making mechanism permitting matters to be resolved through circulation where formal board meetings cannot be convened at short notice, subject to stricter majority approval conditions.

Additionally, representation of the Finance Division on the Executive Committee has been replaced with representation from the Defence Division, while the Director Finance of the authority has also been added to the committee structure.

The proposed amendments further relax eligibility conditions for appointment of the Director General of the Pakistan Airports Authority by permitting candidates from the private sector, in addition to public sector officials, subject to qualifications and criteria to be prescribed through subordinate rules and regulations.