Industrial Development Bank of Pakistan (Reorganization and Conversion) Act, 2011

This 2011 Act converts the Industrial Development Bank of Pakistan (IDBP), a state-owned development finance institution, into an ordinary private company called Industrial Development Bank Limited. Section 3 requires the Federal Government to set up this new company under the Companies Ordinance, 1984, with the specific job of taking over IDBP's business, contracts, assets and liabilities.

Section 4 says the new Company is automatically treated as a banking company under the State Bank of Pakistan Act, 1956 and the Banking Companies Ordinance, 1962 until it gets its own banking licence from the State Bank of Pakistan, which it must apply for so it can keep operating through IDBP's existing branches.

Section 5 is the operational core: once the Company is registered, the Federal Government issues an order transferring all of IDBP's assets, contracts, liabilities and ongoing projects to it, allotting shares to IDBP's existing shareholders and bondholders in proportion to their holdings, and formally dissolving IDBP. Section 6 protects staff — permanent employees with at least one year of continuous service move to the Company on their existing terms, though they cannot claim any compensation just because of the transfer.

Sections 7 and 8 make sure pending lawsuits and government guarantees on IDBP's foreign and local loans carry over to the Company unaffected by the change. Sections 9 to 11 shield the whole restructuring from being challenged in court and protect officials acting in good faith, and section 11 lets this Act override any conflicting law.

Unusually, section 14 gives the Act a built-in expiry: except for the company-formation and guarantee provisions, the Act itself lapses eighteen months after commencement, by which point the Company's management is expected to have arranged a public-private partnership or full privatization. Section 15 also retroactively validates anything IDBP did between 26 November 2009 and the Act's commencement.