The National Assembly Standing Committee on Finance has approved two major government measures aimed at improving financial contract enforcement and strengthening oversight of public debt management during a meeting chaired by Naveed Qamar.

One of the approved measures introduces a new legal framework allowing banks and corporate entities to settle financial obligations by adjusting payable and receivable amounts against each other instead of pursuing lengthy individual recoveries. Officials from the State Bank of Pakistan told lawmakers the reform would modernize financial agreements, streamline settlements, and improve efficiency across the banking and corporate sectors.

Under the proposed system, parties involved in financial contracts will be able to finalize payments by offsetting outstanding liabilities at the time of settlement. Authorities said this approach would significantly reduce disputes that often remain stuck in courts for years due to stay orders and legal complications.

The framework also introduces an arbitration-based mechanism to resolve disagreements more quickly outside prolonged litigation. Minister of State for Finance Bilal Azhar Kayani told the committee that the reform is designed to strengthen the overall financial system by improving certainty in contractual enforcement.

Alongside financial sector reforms, the committee reviewed amendments related to government borrowing limits. Officials informed members that existing law caps public debt at 60 percent of GDP, while the ratio had reached 69.9 percent in the previous year.

The Finance Ministry said efforts are underway to gradually reduce the debt burden, highlighting that Pakistan is currently maintaining a primary budget surplus despite ongoing fiscal pressures. Officials added that debt management reforms have extended the maturity period of domestic borrowing beyond the earlier average duration of two years and six months.

Committee members expressed concern over repeated breaches of statutory debt limits and insufficient parliamentary monitoring. The chairman directed that quarterly public debt reports be presented regularly before parliament to enhance transparency and strengthen accountability over government borrowing.