BANKING LAW

Traversing through the course, provisions of statute shall be construed in light

of existing case laws and banking practice. Main focus of the study shall be to
equip knowledge of Banking Practice and Laws of Pakistan in light of
International Historical and legal developments.

Modus Operandi

Group Tasks/Assessments after every 4 Lecturers

Mid-terms Assessments
Final Assessment
Final Examination

COURSE OUTLINE
✓ Evolution of banking and introduction of Modern Banking in the
second world countries
✓ Modern Banking in England followed by legal developments

State Bank of Pakistan Act 1956

✓ History of State Bank of Pakistan and significant laws
✓ Primary and Secondary function of State Bank of Pakistan scope of
SBP Corporation and Prohibitions over SBP under relevant provisions
of the Act 1956
✓ Prudential Regulations and its effect in light of case laws
✓ Bill of Exchange and penalties prescribed under SBP Act 1956 for
unauthorized issue of bills/notes
✓ Commercial Banks and their obligation against SBP with regard to
Cash Reserve under relevant laws

Negotiable instruments Act 1881

✓ Negotiable Instruments
✓ Cheque in banking practice
✓ Bill of Exchange

Financial Institution Ordinance 2001

 ✓ Bank Customer relationship
✓ Suits to be brought in Banking Court, application of Section and 9 and
10 in light of case laws.
✓ Mortgage, its effect and sale of mortgage property with and without
intervention of court
✓ Offences under Section 20 and excess of jurisdiction in light of
judgments

Banking Companies Ordinance 1962

✓ Bank, Account and Account Holder
✓ Principles and forms of lending in Pakistan
✓ Security and advances against finances
✓ Power of SBP under Banking Companies Ordinance 1962
✓ Banker duty of secrecy in light of legal precedents
✓ Winding up of Banking Company
✓ Banking Ombudsman, its scope and jurisdiction

Modarba Companies and Modarba (Floating and Control) Ordinance

1980
✓ Registration of Modarba
✓ Scope and powers of Registrar
✓ Winding Up

Islamic Banking
✓ Interest free Banking
✓ Musharikah
✓ Ijarah
✓ Ijara Wa Iqtina
✓ Mudarabah
✓ Murabaha
✓ Istisna
✓ Salam
✓ Musawamah

KEY READING:
✓ The Manual of Banking Laws in Pakistan by Malik Saleem Iqbal Awan
✓ Practise and Law of Banking in Pakistan by Dr. Asrar H Saddiqui
✓ Banking Law and Practise in Pakistan by M.L. Tannan
✓ Paget’s Law of Banking by Maurice Megrah & F.R.Ryder,
✓ Practice and Law of Banking by C.B.Drover and R.W.B. Bosley, Sheldon’s
✓ Banking Theory, Law and Practice by K.P.M. Swadnrow & P.N. Vashney,
✓ Law and Practice of Banking by Prof. Sohrab R. Dowar,
✓ The Law Relating to Banking by T.G. Reeday,
✓ Manual of Banking Laws in Pakistan by Ch. Muhammad Aslam Hayat and
Khursheed Saeed,
✓ Non Interest Banking in Pakistan by Abdur Jabbar Khan,
✓ Commercial Banking Law by R.R. Pennington and A.H. Hudson,
✓ Eliminating Interest from Banking by Nawazish Ali Zaidi,
✓ Leading Cases in the Law of Banking by Lord Chorlgy and P.E. Smart,
✓ Bank Frauds; Prevention and Detection by B.R.Sharma Universal Law
Publishing Co., Delhi