Section 2: Definitions

Plain-Language Summary

A general explanation to aid understanding. The official statutory text appears below.

This section defines the following terms used in The Corporate Industrial Restructuring Corporation Ordinance, 2000: • Administration Committee — the administration committee established under section 12; • Board — the Board of directors constituted under section 6; • book value — the rupee amount, inclusive of principal and accrued profit, owed by any obligor in connection with any financial asset as reflected on the books and records of the financial institution, as of the transfer date; • Chairman — the chairman of the Board; • Chief Executive — the Chief Executive Officer of the Corporation; • collateral — any asset, property, right, claim, entitlement, share, undertaking, guarantee, agreement, document or instrument, security interest, charge, mortgage, lien, hypothecation, pledge or assignment in respect of or as security for any financial asset; • Commission — the Securities and Exchange Commission of Pakistan established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) • Corporation — the Corporate and Industrial Restructuring Corporation established under section 4; • director — a director of the Board; • financial asset — any short, medium or long term interest and non­interest bearing loan, finance, advance, lease, installment, term finance certificate, participation term certificate, musharaka, modaraba, profit and loss sharing agreement, redeemable capital, guarantee or contractual right to receive payment of money in respect of sums advanced or committed to an obligor by a financial institution including collateral pertaining thereto; 1[ • Financial Institution — any bank or other financial institution operating in Pakistan wherein the Federal Government holds any equity.] • Government entity — any Ministry, Division, Department or office of the Federal Government or any corporation, company, trust, statutory body or other entity of which more than fifty per cent of the equity or beneficial interest is directly or indirectly owned or controlled by the Federal Government; • non­performing asset — any financial asset: (a) which is held as an asset on the books of a financial institution; (b) with respect to which the obligor has been in arrears on any payment obligation for a period more than three hundred and sixty­five days, including— 1 Subs. by the Corporate and Industrial Restructuring Corporation (Amdt.) Act, 2005 (3 of 2005) s. 2 for clause (1). (i) collateral with respect to any financial asset; and (ii) a whole or partial right or interest of a financial institution in any financial asset, that otherwise constitutes a non­performing asset including a financial asset with respect to which the financial institution has an ongoing funding obligation; and 1[(c) with respect to which the obligor’s outstanding payment obligation to any financial institution exceeds thirty million rupees: Provided that the Federal Government may, by notification in the official Gazette, alter, reduce or increase the said amount as and when it deems fit.] • obligor — any individual, proprietorship concern, company or other body corporate, trust, partnership or other entity that has, with respect to a non­performing asset, a contractual or legal obligation or duty to make payment, effect performance, provide security, or collateral with respect to any financial asset whether as principal, surety, guarantor or otherwise and whether such obligation is primary, secondary, matured or contingent; • outstanding amount — the book value of a non­performing asset of the financial institution less, — (a) any amount on the books of the financial institution appearing as a specific reserve applicable to that non­performing asset; (b) any amount on the books of the financial institution appearing in a general loan loss and/or other reserve applicable to that non­performing asset; and if, in the opinion of the Board, the book value of the non­performing asset, as adjusted in sub­clauses (a) and (b), is higher than the estimated market price of the non­performing asset, the Board shall commission an independent evaluator to determine such market price and in the event that the market price as determined by the independent evaluator is lower than the book value as adjusted in sub­clauses (a) and (b), such market price shall be deemed to be the outstanding amount; • regulations — regulations made under this Ordinance; • rules — rules made under this Ordinance; • Schedule — the Schedule to this Ordinance; and • State Bank — the State Bank of Pakistan. 1Subs. by the Corporate and Industrial Restructuring Corporation (Amdt.) Ordinance, 2000 (57 of 2000) s. 2 for the original sub­clause (c) This is the official statutory text, shown as written — it is not a paraphrase or a legal opinion. Consult a verified lawyer to see how it applies to your specific situation.

2. Definitions.—In this Ordinance, unless there is anything repugnant in the subject or context,— (a) “Administration Committee” means the administration committee established under section 12; (b) “Board” means the Board of directors constituted under section 6; (c) “bonds” mean bonds, debentures, participation term certificates, term finance certificates, redeemable capital certificates or similar instruments providing for scheduled or contingent payment of debt obligations; (d) “book value” means the rupee amount, inclusive of principal and accrued profit, owed by any obligor in connection with any financial asset as reflected on the books and records of the financial institution, as of the transfer date; (e) “Chairman” means the chairman of the Board; (f) “Chief Executive” means the Chief Executive Officer of the Corporation; (g) “collateral” means any asset, property, right, claim, entitlement, share, undertaking, guarantee, agreement, document or instrument, security interest, charge, mortgage, lien, hypothecation, pledge or assignment in respect of or as security for any financial asset; (h) “Commission” means the Securities and Exchange Commission of Pakistan established under section 3 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997); (i) “Corporation” means the Corporate and Industrial Restructuring Corporation established under section 4; (j) “director” means a director of the Board; (k) “financial asset” means any short, medium or long term interest and non­interest bearing loan, finance, advance, lease, installment, term finance certificate, participation term certificate, musharaka, modaraba, profit and loss sharing agreement, redeemable capital, guarantee or contractual right to receive payment of money in respect of sums advanced or committed to an obligor by a financial institution including collateral pertaining thereto; 1[(l) “Financial Institution” means any bank or other financial institution operating in Pakistan wherein the Federal Government holds any equity.] (m) “Government entity” means any Ministry, Division, Department or office of the Federal Government or any corporation, company, trust, statutory body or other entity of which more than fifty per cent of the equity or beneficial interest is directly or indirectly owned or controlled by the Federal Government; (n) “non­performing asset” means any financial asset: (a) which is held as an asset on the books of a financial institution; (b) with respect to which the obligor has been in arrears on any payment obligation for a period more than three hundred and sixty­five days, including— 1 Subs. by the Corporate and Industrial Restructuring Corporation (Amdt.) Act, 2005 (3 of 2005) s. 2 for clause (1). (i) collateral with respect to any financial asset; and (ii) a whole or partial right or interest of a financial institution in any financial asset, that otherwise constitutes a non­performing asset including a financial asset with respect to which the financial institution has an ongoing funding obligation; and 1[(c) with respect to which the obligor’s outstanding payment obligation to any financial institution exceeds thirty million rupees: Provided that the Federal Government may, by notification in the official Gazette, alter, reduce or increase the said amount as and when it deems fit.] (o) “obligor” means any individual, proprietorship concern, company or other body corporate, trust, partnership or other entity that has, with respect to a non­performing asset, a contractual or legal obligation or duty to make payment, effect performance, provide security, or collateral with respect to any financial asset whether as principal, surety, guarantor or otherwise and whether such obligation is primary, secondary, matured or contingent; (p) “ outstanding amount” means the book value of a non­performing asset of the financial institution less, — (a) any amount on the books of the financial institution appearing as a specific reserve applicable to that non­performing asset; (b) any amount on the books of the financial institution appearing in a general loan loss and/or other reserve applicable to that non­performing asset; and if, in the opinion of the Board, the book value of the non­performing asset, as adjusted in sub­clauses (a) and (b), is higher than the estimated market price of the non­performing asset, the Board shall commission an independent evaluator to determine such market price and in the event that the market price as determined by the independent evaluator is lower than the book value as adjusted in sub­clauses (a) and (b), such market price shall be deemed to be the outstanding amount; (q) “regulations” means regulations made under this Ordinance; (r) “rules” means rules made under this Ordinance; (s) “Schedule” means the Schedule to this Ordinance; and (t) “State Bank” means the State Bank of Pakistan. 1Subs. by the Corporate and Industrial Restructuring Corporation (Amdt.) Ordinance, 2000 (57 of 2000) s. 2 for the original sub­clause (c).

Effective date: 2000-01-01

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