IT has been observed recently that banks are asking the banking courts under Section 51(e) CPC, read with Section 151, to block the CNIC of the borrower who has been unable to satisfy the decree of the said courts. This is totally repugnant to Article 8 of the Constitution which guarantees fundamental rights of the citizens.

This is tantamount to awarding the death sentence, as without a functional CNIC one becomes a useless citizen of the state having no right to earn a livelihood.

As per the procedure of the banking courts, banks file suit of recovery against defaulters under the Financial Institutions Recovery Ordinance 2001, and the courts award decree against the borrower if they feel convinced. The banks then file for the execution of the decree through the banking court. This leads to two situations: one, if the bank has securities enough to get the decree satisfied, there is no further action and the bank gets its financing through the sale of such securities; two, if the decree is in excess of the sum of financing by the bank, coercive actions are taken by the bank through court orders/actions. Here comes the real cruelty of the banks.

The onus of the fault of excess financing should be on the banks as to why they extended the loan without covering its exposure with enough securities from the borrower.

The banks take cover behind the banking courts to hide their follies and blunders, and put the liberty of the citizens in danger. The banking courts must ask the banks why a wrong, risky decision was made in the first place, and the banks must be put on trial for violating the Prudential Regulations of the State Bank of Pakistan which give guidelines regarding grant of loans. After all, bank deposits are based on public money and they cannot be allowed to dish them out without securities.

By blocking the CNICs of the borrowers due to the fault of the banks, the state is committing financial murder of the borrower, and this must be stopped forthwith.

Name withheld on request
Karachi

Published in Dawn, March 4th, 2021

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