Establishment of the Federal Bank for Cooperatives and Regulation of cooperative Banking Act, 1977 (Repeal by Act XXVi of 2018 s.2)

This 1977 Act created the Federal Bank for Cooperatives, a national bank meant to fund and oversee Pakistan's cooperative banking sector, and set rules for how cooperative banks generally were to be regulated. Section 5 establishes the Bank, Section 6 sets its share capital, and Sections 8 to 15 set up its governance structure: a Board of Directors, a Managing Director, rules on who is disqualified from serving as a Director, and an Advisory Committee. Section 17 lists the Bank's core business and functions, while Section 18 lists business it is barred from doing.

The Act gave the Bank strong regulatory and enforcement tools over cooperative banks and their borrowers. Section 22 provides special mechanisms for the Bank to enforce loan claims, Section 23 covers recovery of the Bank's dues, and Section 24 gives the Bank a general lien and preferential treatment over its dues compared to other creditors. Sections 25 to 30 let the Bank inspect provincial cooperative banks, restrict their ability to accept deposits, send observers to their meetings, set policy guidelines binding on them, and even remove directors or take over (supersede) the board of a provincial cooperative bank if needed.

Officers and employees were bound to keep certain records confidential (Section 32), and Section 34 restricted producing or giving evidence from unpublished Bank records in court without permission. The Bank enjoyed exemptions from certain taxes (Section 38), stamp duty (Section 39) and compulsory registration of some instruments (Section 40). Section 43 sets out penalties for offences under the Act, and Section 47 provides indemnity (legal protection) for people acting in good faith under the Act; a later-inserted Section 51B extended that protection broadly to the Bank, provincial cooperative banks and their staff regarding property in their custody.

This Act has since been repealed — the document header itself notes it was repealed by Act XXVI of 2018, s.2 — and a footnote in the text records that the Bank itself was actually liquidated back in 2002 under section 41 (SRO 717(I)/2002). This is a clear case where the specific institution and legal framework no longer exist in current law; anyone researching current cooperative banking regulation should look at the successor legal framework rather than relying on this Act.

The Act also made itself override other laws (Section 3) and gave the Federal Government power to exempt persons or suspend parts of the Act in certain cases (Section 4), reflecting how central a role it was meant to play in the cooperative banking system at the time it was in force.