Cabinet to approve appointment of registrar today
ISLAMABAD: The federal cabinet which is scheduled to meet on Thursday (today) will approve appointment of Registrar for secured transactions from financial institutions to the SMEs and agriculture sector.
The Financial Institutions (Secured Transactions) Act which was enacted in 2016 provided for the establishment of Registry Office to register charge on assets, especially the movable assets of the borrowers which will facilitate small borrowers from SME and agriculture in security credit from formal financial institutions.
In Pakistan, both sectors face constraints in accessing the formal financial markets, which obstructs their growth. One of the reasons for their poor accessibility to financial markets is their inability to offer tangible collateral acceptable to lenders. Even when this is available, the lack of an effective enforcement mechanism on these securities, especially on movable securities, results in reluctance of banks to lend. The presence of a secured transaction framework can address this problem to a reasonable extent.
Under section 19 of Financial Institutions (Secured Transaction), Act, 2016, the federal government shall: (i) by notification in the official gazette, establish a registry to be known as the “ Secured Transaction Registry” for the purpose of registration of security interests created by an entity and all matters incidental thereto; (ii) by notification in the official gazette, specify the date from which the registry shall be operational ; (iii) specify the place of the Registry; and (iv) Registry may exercise its functions.
Under section 20(1) of the Act, the federal government can appoint a Registrar for Secured Transaction Registry. The position of Registrar for Secured Transactions Registry was advertised in the national newspapers. Twenty three applications have been received, however, the process of selection has not been completed which will take some time.
Meanwhile, the World Bank is in the process of preparing its report on “Ease of Doing Business” which is likely to be finalized in March 2019. The Establishment of Registry is one the components of Doing Business (DB) survey questionnaire. Pakistan can improve its rating in Doing Business Index after establishing the Registry. To achieve this target, notification of establishment and operationalisation of Registry under Financial Institutions (Secured Transaction) Act, 2016 is required which can only be issued after appointment of Registrar; whereas the process of appointment of full time Registrar will take some time.
Finance Division has proposed the following to the cabinet: (i) Shohail Rajput, Additional Secretary Finance may be assigned additional charge of the post of Registrar as an interim arrangement until appointment of regular incumbent to the post of Registrar for operationalisation of the Registry; (ii) Finance Division may issue notification of establishment of the Registry immediately and notify the Registry as operational on the date of appointment of Registrar; and (iii) the Registry may be housed in Islamabad and the territorial limits of the registry may encompass the whole Pakistan.
The other agenda items of federal cabinet to be presided over by Prime Minister, Imran Khan will be as follows: i) progress report on implementation status of Cabinet Decision taken by the present Government; (ii) transfer of Marine Fisheries Department (MFD) along with Korangi Fish Harbour (KFH) and Office of Fisheries Development Commissioner (FDC) from Ministry of Maritime Affairs to Ministry of National Food Security and Research (NFS&R); (iii) annual report of the National Economic Council (NEC) the Financial Year 2017-18, Cabinet Division; (iv) exemption from PPRA rules 2004 in respect of Procurement under Financial inclusion and Infrastructure Project (FIIP) to be Implemented by Finance Division; (v) designation of National Highways and Motorway Police (NH&MP) to executive provisions of enforcement and traffic control functions specified in the National Highway Safety Ordinance (XL of 2000); (vi) posting of Chairman, Employees Old Age Benefits Institution (EOBI); (vii) establishment of Secured Transaction Registry under Financial Institutions (Secured Transaction) Act, 2016; (vii) approval of signing of Memorandum of Understanding (MoU) between Financial Intelligence Authority (FIA) of Malawi (FIA of Malawi) and financial Monitoring Unit (FMU) of Islamic Republic of Pakistan; (vii) technical supplementary grant of Rs13.0 million for “helpline for legal advice on human rights violations” appointment of Chairman, Gwadar Port Authority; (viii) acceptance of resignation of Sultan Ali Akbar Allana Trustee on the Board of Karachi Port Trust and nomination of Atif Bajwa as his replacement for the Term 2018-2020; (ix) approval in principle of draft Pakistan Institute of Medical Sciences, Islamabad, Reforms Ordinance 2019, National Health Services, Regulations & Coordination Division; and (x) proposed amendment in National Disaster Management Act, 2010, National Health Services.—MUSHTAQ GHUMMAN
