Electronic Transactions Ordinance, 2002.

THE GAZETTE OF PAKISTAN
EXTRAORDINARY
PUBLISHED BY AUTHORITY
PART-I
Acts, Ordinances, President’s Orders and Regulations
Government of Pakistan
MINISTRY OF LAW, JUSTICE, HUMAN RIGHTS AND PARLIAMENTARY AFFAIRS
(Law, Justice and Human Rights Division)
Islamabad, the 11th September, 2002

F. No. 2(1)/2002-Pub.–The following Ordinance promulgated by the President is hereby
published for general information :-ORDINANCE No. LI OF 2002
to recognize and facilitate documents, records,information, communications and transactions in
electronic form, and to provide for the accreditation of certification service providers.
WHEREAS it is expedient to provide for the recognition and facilitation of documents, records,
information, communications and transactions in electronic form, accreditation of certification service
providers, and for matters connected therewith and ancillary thereto;
AN WHEREAS the President is satisfied that circumstances exist which render it necessary to
take immediate action :
Now, THEREFORE, in pursuance of the Proclamation of Emergency of the fourteenth day of
October, 1999, and the Provisional Constitution Order No. 1 of 1999, read with the Provisional Constitution
(Amendment) Order No. 9 of 1999, and in exercise of all powers enabling him in that behalf the President
of the Islamic Republic of Pakistan is pleased to make and promulgate the following Ordinance :-CHAPTER I
PRELIMINARY
1. Short title, extent and commencement, -(1) This Ordinance may be called the Electronic Transactions Ordinance, 2002.
(2) It extends to the whole of Pakistan.
(3) It shall come into force at once.
2. Definitions.-(1) In this Ordinance, unless there is anything repugnant in the subject or context. –
(a)  “Accreditation certificate” means a certificate granted by the Certification Council
to a Certification Service Provider;
(b)  “Accredited Certification Service Provider” means a Certification Service Provider
accredited under this Ordinance to issue certificates for the use of its
cryptography service;
( c)  “Addressee” means the person intended by the originator to receive the electronic
communication but does not include an intermediary;
(d)  “Advanced electronic signature” means an electronic signature which is either -(i)  unique to the person signing it, capable of identifying such person,
created in a manner or using a means under the sole control of the
person using it, and attached to the electronic document to which it
relates in a manner that any subsequent change in the electronic
document is detectable : or
(ii)  provided by an accredited certification service provider and accredited by
the Certification Council as being capable of establishing authenticity and
integrity of an electronic document;
(e) “Appropriate authority” means -(i)  in relation to items contained in the Federal Legislative List of the
Constitution of the Islamic Republic of Pakistan, 1973, the Federal
Legislature or Federal Government;
(ii)  in relation to items contained in the Concurrent Legislative List of the
Constitution of the Islamic Republic of Pakistan, 1973, for which a
Federal law is in force, the Federal Legislature or Federal Government,
and, in all other cases, respective Provincial Legislature or Provincial
Government;
(iii)  in relation to the functions of the Federal Government or respective
Provincial Governments being discharged by a statutory body, that
statutory body; and
(iv)  in relation to matters in respect whereof the Supreme Court or the High
Courts are empowered to make rules for the regulation of their
proceedings, the Supreme Court or High Court, as the case may be;
(f)  “authenticity” means, in relation to an electronic document or electronic signature,
the identification of and attribution to a particular person or information system;
(g)  “automated” means without active human intervention;
(h)  “certificate” means a certificate issued bya Certification Service Provider for the
purpose of confirming the authenticity or integrity or both, of the information
contained therein, of an electronic document or of an electronic signature in
respect of which it is issued;
(i)  “Certification Council” means the Electronic Certification Accreditation Council
established under Section 18;
(j)  “certification practice statement”, means the statement prepared by a certification
service provider specifying the practices it employs in relation to the issuance of
certificates and matter connected therewith;
(k)  “cryptography services” means services in relation to the transformation of
contents of an electronic document from its original form to one that can not be
understood or decoded by any unauthorized person;
(l)  “electronic” includes electrical, digital, magnetic, optical, biometric, electrochemical, wireless or electromagnetic technology;
(m)  “electronic document” includes documents, records, information, communications
or transactions in electronic form;
(n)  electronic signature” means any letters, numbers, symbols, images, characters or
any combination thereof in electronic form, applied to, incorporated in or
associated with an electronic document, with the intention of authenticating or
approving the same, in order to establish authenticity or integrity, or both;
(o)  “information” includes text, message, data, voice, sound, database, video,
signals, software, computer programs, codes including object code and source
code;
(p)  “information system” means an electronic system for creating, generating,
sending, receiving, storing, reproducing,displaying, recording or processing
information;
(q)  “integrity” means, in relation to an electronic document, electronic signature or
advanced electronic signature, the electronic document, electronic signature or
advanced electronic signature that has not been tampered with, altered or
modified since a particular point in time;
( r)  “intermediary” means a person acting as a service provider in relation to the
sending, receiving, storing or processing of the electronic communication or the
provision of other services in relation to it;
(s)  “network service provider”means a person who owns, possesses, operates,
manages or controls a public switched network or provides telecommunication
services;
(t)  “originator”, means a person by whom, or on whose behalf, electronic document
purports to have been generated or sent prior to receipt or storage, if any, but
does not include an intermediary;
(u)  “person” includes an individual, appropriate authority, trust, waqf, association,
statutory body, firm, company including joint venture or consortium, or any other
entity whether registered or not;
(v)  “prescribed” means prescribed by rules made under this Ordinance;
(w)  “repository” means an information system for storing and retrieving certificates or
other information related thereto established under section 23;
(x)  “security procedure” means a procedure which;
(i)  is agreed between parties
(ii)  is implemented in the normal course by a business and which is
reasonably secure and reliable; or
(iii)  in relation to a certificate issued by a certification service provider, is
specified in its certification practice statement;
for establishing the authenticity or integrity, or both, of any electronic document,
which may require the use of algorithms or codes, identifying words and numbers,
encryption, answer back or acknowledgement procedures, software, hardware or
similar security devices;
(y)  “subscriber” means a person who subscribes to the service of a certification
service provider;
(z)  “transaction” means an act or series of acts in relation to creation or performance
of rights and obligations; and
(aa)  “valid accreditation certificate” means an accreditation certificate which has not
been suspended or revoked.
CHAPTER-2
RECOGNITION AND PRESUMPTION
3. Legal recognition of electronic forms. -No document, record, information, communication or transaction shall be denied legal recognition,
admissibility, effect, validity, proof or enforceability on the ground that it is in electronic form and
has not been attested by any witness.
4. Requirement for writing. -The requirement under any law for any document, record, information, communication or
transaction to be in written form shall be deemed satisfied where the document, record,
information, communication or transaction is in electronic form, if the same is accessible so as to
be usable for subsequent reference.
5. Requirement for original form.-(1) The requirement under any law for any document, record, information, communication or
transaction to be presented or retained in its original form shall be deemed satisfied by
presenting or retaining the same if;
(a)  there exists a reliable assurance as to the integrity thereof from the time when it
was first generated in its final form; and
(b)  it is required that the presentation, thereof is capable of being displayed in a
legible form.
(2)  for the purposes of clause (a) of sub-section (1);
(a)  the criterion for assessing the integrity of the document, record, information,
communication or transaction is whether the same has remained complete and
unaltered, apart from the addition of any endorsement or any change which arises
in the normal course of communication, storage or display; and
(b)  the standard for reliability of the assurance shall be assessed having regard to the
purpose for which the document, record, information, communication or
transaction was generated and all other relevant circumstances.
6. Requirement for retention. -The requirement under any law that certain document, record, information, communication or
transaction be retained shall be deemed satisfied by retaining it in electronic form if;
(a)  the contents of the document, record, information, communication or transaction remain
accessible so as to be usable for subsequent reference;
(b)  the contents and form of the document, record, information, communication or transaction
are as originally generated, sent or received, or can be demonstrated to represent
accurately the contents and form in which it was originally generated, sent or received;
and
( c)  such document, record, information, communication or transaction, if any, as enables the
identification of the origin and destination ofdocument record, information, communication
or transaction and the date and time when it was generated, sent or received, is retained.
7. Legal recognition of electronic signatures. -The requirement under any law for affixation of signatures shall be deemed satisfied where
electronic signatures or advanced electronic signature are applied.
8. Proof of electronic signature. -An electronic signature may be proved in order to verify that the electronic document is of the
person that has executed it with the intention and for the purpose of verifying its authenticity or
integrity or both.
9. Presumption relating to advanced electronic signature. – In any proceedings, involving an
advanced electronic signature, it shall be presumed unless evidence to contrary is adduced, that:
(a)  the electronic document affixed with an advanced electronic signature, as is the subject
matter of or identified in a valid accreditation certificate is authentic and has integrity; or
(b)  the advanced electronic signature is the signature of the person to whom it correlates, the
advanced electronic signature was affixed by that person with the intention of signing or
approving the electronic document and the electronic document has not been altered
since that point in time.
10. Stamp Duty. -Notwithstanding anything contained in the Stamp Act. 1899 (II of 1899), for a period of two years
from the date of commencement of this Ordinance or till the time the Provincial Governments
devise and implement appropriate measures for payment and recovery of stamp duty through
electronic means, whichever is later, stamp duty shall not be payable in respect of any instrument
executed in electronic form.
11. Attestation and notarization. -Notwithstanding anything contained in any law for the time being in force, no electronic document
shall require attestation and notarization for a period of two years from the date of commencement
of this Ordinance or till the time the appropriate authority devise and implement measures for
attestation and notarization of electronic documents, whichever is later.
12. Certified copies. -Where any law requires or permits the production of certified copies of any records, such
requirement or permission shall extend to printouts or other forms of display of electronic
documents where, in addition to fulfilment of the requirements as may be specified in such law
relating to certification, it is verified in the manner laid down by the appropriate authority.
CHAPTER 3
ELECTRONIC DOCUMENTS
13. Attribution of communications. -(1) Unless otherwise agreed as between an originator and the addressee, an electronic
communication shall be deemed to be that of the originator if it was sent:
(a) by the originator himself;
(b) by a person who had the authority to act for and on behalf of the originator in
respect of that electronic communication; or
( c) by an automated information system programmed by, or on behalf of the
originator.
(2) Unless otherwise agreed as between the originator and the addressee, the addressee is
to regard an electronic communication as being thatof the originator, and is entitled to act
on that assumption life:
(a) the addressee has no reason to suspect the authenticity of the electronic
communication; or
(b) there do not exist any circumstances where the addressee knows, or ought to
have known by exercising reasonable care, that the electronic communication
was not authentic.
14. Acknowledgement of receipt. -(1) Unless otherwise agreed where the originator has stated that the electronic
communication is conditional on receipt of acknowledgement, the electronic
communication is treated as though it has never been sent, until the acknowledgement is
received.
(2) Where the originator has not agreed with the addressee that the acknowledgement be
given in a particular form or by a particular method, an acknowledgement may be given by
:
(a) any communication, automated or otherwise, by the addressee; or
(b) any conduct of the addressee, sufficient to indicate to the originator that the
electronic communication is received.
15. Time and place of dispatch and receipt of electronic communication. -(1) Unless otherwise agreed between the originator and the addressee, the dispatch of an
electronic communication occurs when it enters an information system outside the control
of the originator.
(2) Unless otherwise agreed between the originator and the addressee, or unless proved
otherwise, the time of receipt of an electronic communication is determined as follows :
(a) if the addressee has designated an information system for the purpose of
receiving the electronic communication, receipt occurs:
(i) at the time when the electronic communication enters the designated
information system; or
(ii) if the electronic communication is sent to an information system of the
addressee that is not the designated information system at the time when
the electronic communication is retrieved by the addressee;
(b) if the addressee has not designated an information system, receipt occurs when
the electronic communication enters and information system of the addressee.
(3) Sub-section (2) applies notwithstanding that the place where the information system is
located may be different from the place where the electronic communication is deemed to
be received under sub-section (4).
(4) Unless otherwise agreed between the originator and the addressee, an electronic
communication is deemed to be dispatched atthe place where originator ordinarily
resides or has his place of business, and isdeemed to be received at the place where the
addressee ordinarily resides or has his place of business.
(5) For the purpose of this section :
(a) if the originator or the addressee has more than one place of business, the place
of business is that which has the closest relationship to the underlying transaction
or, where there is no underlying transaction, the principal place of business:
(b) if the originator or the addressee does not have a place of business, reference is
to be made to the usual place of residence; and
( c) “Usual place of residence” in relation to a body corporate, means the place where
it is incorporated or otherwise legally constituted.
16. Electronic documentation of appropriate authority. -(1) Nothing contained hereinbefore shall confera right upon any person that any appropriate
authority should accept, issue, create, retain, preserve any document in electronic form or
effect monetary transaction in electronic form.
(2) any appropriate authority pursuant to any law or procedure:
(a) accepts the filing of documents, or requires that documents be created or
retained;
(b) issues any permit, certificate, licence or approval; or
(c) provides for the method and manner of payment, procurement or transaction may
not withstanding anything contained to the contrary in such law or procedure;
(i)  accept the filing of such documents, or creation or retention of such
documents in the form of electronic documents;
(ii) issue such permits, certificate, licence or approval in the form of
electronic document; or
(iii) make such payment, procurement or transaction in electronic form.
(3) In any case where an appropriate authority decides to perform any of the functions in
clause (i), (ii) and (iii) of sub-section (2) may specify;
(a) the manner and former in which such electronic documents shall be filed, created,
retained or issued;
(b) when such electronic document has to be signed, the type of electronic signature,
advanced electronic signature or a security procedure required;
(c) the manner and format in which such signature shall be affixed to the electronic
document, and the identity of or criteria that shall be met by any certification
service provider used by the person filing the document;
(d) control process and procedures as appropriate to ensure adequate integrity,
security and confidentiality of electronic documents, procurement, transactions or
payment; and
CHAPTER 4
CERTIFICATION SERVICE PROVIDERS
17. Certification Service Providers. -(1) Nothing in this Ordinance shall impede or in any way restrict the rights of any certificate
service provider to engage in the business of providing certification services without being
accredited.
(2) No person shall hold himself out as an accredited certification service provider unless he
holds a valid accreditation certificate issued under section 24 by the Certification Council.
CHAPTER 5
CERTIFICATION COUNCIL
18. Establishment of the Certification Council. -(1) Within sixty days of the promulgation of thisOrdinance, the Federal Government shall, by
notification in the official Gazette, constitute an Certification Council to be known as
Electronic Certification Accreditation Council.
(2) The Certification Council shall be a body corporate with perpetual succession and a
common seal, and shall by the said name sue or be sued.
(3) The Certification Council shall comprise of five members, with four members from the
private sector. One of the Members shall be designated as the chairman.
(4) The members of the Certification Council shall be appointed by the Federal Government
for a term of three years and shall be eligible for reappointment once for another term of
three years after the expiry of their first term of appointment.
(5) No act or proceeding of the Certification Council shall be invalid by reason only of the
existence of any vacancy among its members or any defect in its constitution discovered
after such act or proceeding of the Certification Council.
(6) Except for the grant, renewal, revocation or suspension of accreditation, the Certification
Council may from time to time delegate one or more of its functions and powers to one or
more of its members.
(7) A member of the Certification Council shall not be removed except on the grounds of
misconduct.
(8) No member, once appointed, shall have any direct financial interest in any concern or
business relating to cryptography services.
(9) Decisions of the Certification Council shall be taken by a majority of the members,
however in case of tie the Chairman shall have a casting vote.
(10) Save as provided herein, the terms and conditions of service of the members of the
Certification Council shall be such as may be prescribed.
19. Qualifications of member. -Of the five members of the Certification Council:
(a) one shall be telecommunications engineer with at least seven years work experience, of
which at least one year is in the field of crytography services;
(b) two shall be professional or academics with at least seven years work experience in the
field of information technology;
( c) one shall have an administrative background with at least seven years experience in a
private or public organization; and
(d) one member shall be an advocate with at least seven years experience and adequate
knowledge of laws relating to information technology and telecommunications.
20. Funds of the Certification Council. -The funds of the Certification Council shall comprise of :
(a) grants from the Federal Government;
(b) fee for grant and renewal of accreditation certificate; and
( c) fee, not exceeding ten Rupees, for every certificate deposited in the repository.
(d) fines.
21. Functions of the Certification Council. -(1) The Certification Council shall perform such functions as are specified in this Ordinance
or may be prescribed.
(2) without prejudice to the generality of the foregoing sub-section, the Certification Council
shall :
(a) grant and renew accreditation certificates to certification service providers, their
cryptography services and security procedures;
(b) monitor and ensure compliance by accredited certification service providers with
the terms of their accreditation and revoke or suspend accreditation in the manner
and on the grounds as may be specified in the regulations;
( c) monitor compliance of accredited certification service providers with the
provisions of this Ordinance;
(d) establish and manage the repository;
(e) carry out research and studies in relation to cryptography services and to obtain
public opinion in connection therewith;
(f) recognize or accredit foreign certification service providers;
(g) encourage uniformity of standards and practices;
(h) give advice to any person in relation to any matter covered under this Ordinance;
and
(i) make recommendations to an appropriate authority in relation to the matters
covered under this Ordinance.
22. Application of Act XVII of 1996. -Notwithstanding anything contained in the Pakistan Telecommunication (Re-organisation) Act,
1996 (XVII of 1996), the Certification Council shall be exclusively responsible to grant, renew,
suspend or revoke the accreditation to certification service providers, their cryptography services
and security procedures;
Providedthat, the foregoing provision shall not affect the applicability or operation of the
provisions of the Pakistan Telecommunication (Re-organisation) Act, 1996 (XVII of 1996) to the
telecommunication systems or telecommunication services, other than cryptography services,
provided by the cryptography service providers.
23. Repository. -(1) The Certification Council shall establish and manage a repository for all accreditation
certificates, certificates issued by accredited certification service providers and for such
other information as may be specified in regulations made by the Certification Council.
(2) The Certification Council shall take appropriate measures to ensure the security of all
information contained in the repository.
(3) All information contained in the repository shall be open to public inspection.
(4) Notice of suspension or revocation of any accreditation or of certificate issued by an
accredited certification service provider, shall be posted in the repository within the
prescribed time.
24. Grant of accreditation. -
(1) The Certification Council may grant accreditation to certification service provider, its
cryptography services, electronic signature or advanced electronic signature and security
procedures who complies with the criteria for accreditation specified in the regulations.
(2) The terms and conditions of the accreditation,including those relating to duration of the
accreditation, renewal, suspension or revocation, shall be specified in the regulations.
(3) The fee for grant and renewal of the accreditation shall be as prescribed.
(4) The form and manner of proceedings for the consideration of application for grant,
renewal, suspension or revocation of accreditation shall be specified in the regulations:
Providedthat, the regulations shall provide for a transparent procedure with due regard
to the right of hearing.
25. Certification practice statement. -(1) Each certification service provider, desirous of being accredited, shall prepare and have at
all times accessible a certification practice statement in such form and with such details,
particulars and contents as may be specified inthe regulations made by the Certification
Council.
(2) Without prejudice to the generality of the foregoing, the regulations may provide for :
(a) prompt information to persons likely to be adversely affected by any event relating
to the information system of the certification service provider or inaccuracy,
invalidity or misrepresentation contained in a certificate;
(b) identification of subscribers;
(c) suspension or revocation of certificate;
(d) accuracy of information contained in a valid accreditation certificate;
(e) forseeability of reliance on valid accreditation certificates; and
(f) deposit of certificates or notification of any suspension or revocation of any
accreditation certificate or any other fact or circumstance affecting the certificate,
in the repository.
(3) The certification practice statement shall be submitted to Certification Council for approval
along with the application for accreditation.
(4) Any subsequent change in the approved certification practice statement shall be initiated
and processed in such manner as may be specified in the regulations made by the
Certification Council, and upon approval by the Certification Council, shall be incorporated
in the certification practice statement.
(5) A copy of the certification practice statement shall be maintained at the office of the
Certification Council and shall be open to public inspection.
(6) Subject to such limitations as may be specified in the regulations made under sub-section
(1), a certification service provider shall, during the period of validity of an accreditation
certificate published for reliance by any person, be deemed to warranting to such person
that :
(a) the certification service provider has complied with the requirements of this
Ordinance, rules and regulations made under this ordinance; and
(b) the information contained in the certificate is accurate.
(7) The Certification Council may suspend or revoke the accreditation of a certification
service provider for failure to comply with the provisions of this section :
Providedthat, an order for suspension or revocation of accreditation shall be made in the
manner specified in regulations made under sub-section (1) after providing reasonable
right of hearing.
26. Decision of Certification Council. -All applications and matters coming before the Certification Council shall be decided through a
speaking order, as expeditiously as possible but notlater than ninety days except in extraordinary
circumstances and for reasons to be recorded.
27. Appointment of offices, employees and advisers. -(1) The Certification Council may appoint such officers, employees and advisers as it may
consider necessary for the efficient performance of its functions on such terms and
conditions as it may prescribe by the regulations.
(2) The Certification Council may establish regional or local offices as may be necessary for
efficient performance of its functions.
CHAPTER 6
AMENDMENTS OF CERTAIN LAWS
28. Amendment of Act XVII of 1996. -(1) In the Pakistan Telecommunication (Re-organisation) Act, 1996 (XVII of 1996), clause (b)
of sub-section (2) of section 57 shall be omitted.
(2) Any provision in any licence issued by the Pakistan Telecommunication Authority under
the aforesaid Act prohibiting the provision or use of cryptography services shall cease to
have effect subject to provisions of this Ordinance.
29. Amendment of Presidential Order No. X of 1984. -For the purposes of this Ordinance, the Qanun-e-Shahadat Order, 1984, (P.O. No. 10 of 1984)
shall be read subject to the amendments specified in the Schedule to this Ordinance.
30. Extension to electronic forms.
Notwithstanding anything contained in any other law for the time being in force, the expressions
“attestation”, “books”, “books of accounts”, “certificate”, “charts”, “deed”, “document”, “document of
title”, “execution”, “instrument”, “ledger”, “map”, “original”, “plans”, “publish”, “record”, “register”,
“seal”, “signature”, “witnessing”, “words”, “writing”, or other words assuming paper or other
tangible medium in relation thereto, shall mutatis mutandis, extend to electronic forms thereof.
CHAPTER 7
OTHER LAWS AND JURISDICTION
31. Application to certain laws barred. -(1) Subject to sub-section (2) nothing in this Ordinance shall apply to:
(a) a negotiable instrument as defined in section 13 of the Negotiable Instruments
Act, 1881 (XXVI of 1881);
(b) a power-of-attorney under the Powers of Attorney Act, 1881 (VII of 1882);
(c) a trust as defined in the Trust Act 1882 (II of 1882), but excluding constructive,
implied and resulting trusts;
(d) a will or any form of testamentary disposition under any law for the time being in
force; and
(e) a contract for sale or conveyance of immovable property or any interest in such
property.
(2) The Federal Government after consultation with the provinces may, by notification in the
official Gazette and subject to such conditionsand limitations as may be specified therein,
declare that the whole or part of this Ordinance shall apply to the whole or part of one or
more instruments specified in clauses (a) to (e) of sub-Section (1).
32. Application to acts done outside Pakistan. -The provisions of this Ordinance shall apply notwithstanding the matters being the subject hereof
occurring outside Pakistan, in so far as they are directly or indirectly connected to, or have an
effect on or bearing in relation to persons, information systems or events within the territorial
jurisdiction of Pakistan.
33. Overriding effect. -The provisions of this Ordinance shall apply notwithstanding anything to the contrary contained in
any other law for the time being in force.
CHAPTER 8
OFFENCES
34. Provision of false information, etc. by the subscriber. -(1) Any subscriber who :
(a) provides information to a certification service provider knowing such information
to be false or not believing it to be correct to the best of his knowledge and belief;
(b) fails to bring promptly to the knowledge of the certification service provider any
change in circumstances as a consequence whereof any information contained in
a certificate accepted by the subscriber or authorized by him for publication or
reliance by any person, ceases to be accurate or becomes misleading, or
(c) knowingly causes or allows a certificate or his electronic signatures to be used in
any fraudulent or unlawful manner;
shall be guilty of an offence under this Ordinance.
(2) The offence under sub-section (1) shall be punishable with imprisonment either
description of a term not exceeding seven years, or with fine which may extend to ten
million rupees, or with both.
35. Issue of false certificate, etc. -(1) Every director, secretary and other responsible officer, by whatever designation called,
connected with the management of the affairs of a certification service provider, which :
(a) issues, publishes or acknowledges a certificate containing false or misleading
information;
(b) fails to revoke or suspend a certificate after acquiring knowledge that any
information contained therein has become false or misleading;
(c) fails to revoke or suspend a certificate in circumstances where it ought
reasonably to have been known that any information contained in the certificate is
false or misleading;
(d) issues a certificate as accredited certification service provider while its
accreditation is suspended or revoked;
shall be guilty of any offence under this Ordinance.
(2) The offence under sub-section (1) shall be punishable with imprisonment either
description of a term not exceeding seven years, or with fine which may extend to ten
million rupees, or with both.
(3) The certification service provider or its employees specified in sub-section (1), shall also
be liable, upon conviction, to pay compensation for any foreseeable damage suffered by
any person or subscriber as a direct consequence of any of the events specified in
clauses (a) to (d) of sub-section (1).
(4) The compensation mentioned in sub-section (3) shall be recoverable as arrears of land
revenue.
36. Violation of privacy of information. -Any person who gains or attempts to gain access to any information system with or without intent
to acquire the information contained therein or togain knowledge of such information, whether or
not he is aware of the nature or contents of such information, when he is not authorised to gain
access, as aforesaid, shall be guilty of an offence under this Ordinance punishable with
imprisonment of either description of a term not exceeding seven years, or fine which may extend
to one million rupees, or with both.
37. Damage to information system, etc. -(1) Any person who does or attempts to do any act with intent to alter, modify, delete,
remove, generate, transmit or store any information through or in any information system
knowingly that he is not authorised to do any ofthe foregoing, shall be guilty of an offence
under this Ordinance.
(2) Any person who does or attempts to do any act with intent to impair the operation of, or
prevent or hinder access to, any information contained in any information system,
knowingly that he is not authorised to do any ofthe foregoing, shall be guilty of an offence
under this Ordinance.
(3) The offences under sub-section (1) and (2) of this section will be punishable with either
description of a term not exceeding seven years or fine which may extend to one million
rupees, or with both.
38. Offences to be non-bailable, compoundable and cognizable. -All offences under this Ordinance shall be non-bailable, compoundable and cognizable.
39. Prosecution and trial of offences. -No Court inferior to the Court of Sessions shall try any offence under this Ordinance.
CHAPTER 9
MISCELLANEOUS
40. Limitation on liability of network service providers. -In the absence of intent to facilitate, aid or abet, a network service provider shall not be subject to
any civil or criminal liability solely for the reason of use of his telecommunication system in
connection with a contravention of this Ordinance by a person not subject to the direction or
control of the network service provider.
Explanation:Telecommunication system in this section shall have the meaning given thereto
under the Pakistan Telecommunication (Re-organisation) Act, 1996 (XVII of 1996).
41. Immunity against disclosure of information relating to security procedure. -(1) Subject to sub-section (2), no person shall be compelled to disclose any password, key or
other secret information exclusively within his private knowledge, which enables his use of
the security procedure or advanced electronic signature.
(2) Sub-section (1) shall not confer any immunity where such information is used for the
commission of any offence under any law for the time being in force.
42. Power to make rules. -The Federal Government may, by notification in the official Gazette, make rules to carry out the
purposes of this Ordinance.
43. Power to make regulations.-(1) The Certification Council may, with the prior approval of the Federal government, make
regulations to carry out the purpose of this Ordinance.
(2) Without prejudice to the generality of the sub-section (1), regulations may provide for :
(a) safety, control or management of keys, passwords or other secret information
relating to use of services of accredited certification service providers;
(b) standards, procedures and practices for time and date stamping;
(c) minimum qualifications of staff of accredited certification service providers;
(d) adequacy of facilities and equipment for secure and reliable operation;
(e) privacy and protection of data of subscribers;
(f) inspection of operations;
(g) cross-certifications, accreditation, recognition, bridge certification or other
arrangements with certification service providers based in other countries;
(h) development of certification management system;
(i) reparation to subscribers for damage arising from negligence of certification
service provider with conditions for and limits to liability;
(j) identification of areas of commerce or governance for use of certificate;
(k) standardization and technology relating to protocols, algorithms, interpretability of
systems, applications and infrastructure for accredited certification service
providers;
(l) form and contents of applications for accreditation;
(m) suspension or revocation of certification;
(n) suspension or revocation of accreditation;
(o) certificate profiles with mandatory and optional fields and extension fields, if any;
(p) certificate revocation and suspension list profiles with mandatory and optional
fields, and extension fields (if any);
(q) retention of records by certification authorities and the repository;
(r) recommended code of practice for handling and storage of business information
and records in electronic form; and
(s) regulation of access and audit trails.
44. Prior publication of rules and regulations. -(1) All rules and regulations proposed to be made by the Federal Government and the
Certification Council under this Ordinance shall be published in the official Gazette and in
at least one English and one Urdu daily with nationwide circulation, in draft form at least
thirty days before the intended date of coming into operation.
(2) The Certification Council shall keep record of all comments received on the draft of the
rules or regulations, and shall prepare a report thereon addressing each comment.
(3) The notification of the rules or regulations in their final form in the official Gazette shall be
accompanied with a report of the Certification Council referred to in sub-section (2).
45. Removal of difficulties. -
The Federal Government may, by notification in the official Gazette, make provisions for removal
of difficulties in a manner not inconsistent with the provisions of this Ordinance.
SCHEDULE
(See Section 29)
AMENDMENT IN QANUN-E-SHAHADAT ORDER, 1984 (P.O. No. 10 OF 1984)
1. Amendment of Article 2, P.O. No. 10 of 1984. -In the Qanun-e-Shahadat Order, 1984 (P.O. No. 10 of 1984), hereinafter referred to as the said
Order, in clause (1), after sub-clause (d), the following new sub-clause (e) and (f) shall be added,
namely;
“(e) the expression, “automated”, “electronic”, “information”, “information system”, “electronic
document”, “electronic signature”, “advanced electronic signature” and “security
procedure”, shall bear the meanings given inthe Electronic Transaction Ordinance, 2002;
(f) the expression”certificate”, where the context so admits, includes the meaning given to it
in the Electronic Transactions Ordinance, 2002.”
2. Amendment of Article 30, P.O. No, 10 of 1984. -In the said Order, in Article 30, for the full stop at the end a colon shall be substituted and
thereafter the following explanation shall be added, namely;
“Explanation. – Statements generated by automated information systems may be attributed to the
person exercising power or control over the said information system.”
3. Insertion of new Article 46, P.O. No. 10 of 1984. -In the said Order, after Article 46, the following new Article shall be inserted, namely :-“46-A. Relevance of information generated, received or recorded by automated information
system. - Statements in the form of electronic documents generated, received or recorded
by an automated information system while it is in working order, are relevant facts.”
4. Amendment of Article 59, P.O. No. 10 of 1984. -In the said Order, in Article 59–
(a)  after the word “impressions” the comma and the words “. Or as to authenticity and
integrity of electronic documents made by or through an information system” shall be
inserted; and
(b)  for the words “are relevant facts” the words and commas “or as to the functioning,
specifications, programming and operations of information systems, are relevant facts”
shall be substituted.
5. Amendment of Article 73, P.O. No. 10 of 1984. -In the said Order, in Article 73, after the second Explanation, the following new Explanations shall
be added, namely;
“Explanation 3. – A printout or other form of output of an automated information system
shall not be denied the status of primary evidence solely for the reason
that it was generated, sent, received or stored in electronic form if the
automated information system was in working order at all material times
and, for the purposes hereof, in the absence of evidence to the contrary,
it shall be presumed that the automated information system was in
working order at all material times.
“Explanation 4. – A printout or other form of reproduction of an electronic document, other
than a document mentioned in Explanation 3 above, first generated, sent,
received or stored in electronic form, shall be treated as primary evidence
where a security procedure was applied thereto at the time it was
generated, sent, received or stored.”
6. Insertion of new Article, P.O. No. 10 of 1984. -In the said Order, after Article 78, the following new Article shall be inserted, namely :-“78-A. Proof of electronic signature and electronic document. – If an electronic document is
alleged to be signed or to have been generated wholly or in part by any person through
the use of an information system, and where such allegation is denied, the application of a
security procedure to the signature or the electronic document must be proved.”
7. Amendment of Article 85, P.O. No. 10 of 1984. -In the said Order, in Article 85, after clause (5), the following new clause (6) shall be added,
namely:
“(6) certificates deposited in a repository pursuant to the provisions of the Electronic
Transactions Ordinance, 2002.”
___________

Prevention of Electronic Crimes Ordinance, 2007

THE GAZETTE OF PAKISTAN
EXTRAORDINARY
PUBLISHED BY AUTHORITY
PART-I
Acts, Ordinances, President’s Orders and Regulations
Government of Pakistan
MINISTRY OF LAW, JUSTICE, HUMAN RIGHTS AND PARLIAMENTARY AFFAIRS
(Law, Justice and Human Rights Division)
Islamabad, the 31
st
December, 2007
F. No. 2(1)/2007-Pub.–The following Ordinance promulgated by the President is hereby
published for general information :-ORDINANCE No. LXXII OF 2007
AN
ORDINANCE
to make provision for prevention of the electronic crimes
WHEREAS it is expedient to prevent any action directed against the confidentiality, integrity and
availability of electronic system, networks and data as well as the misuse of such system, networks and
data by providing for the punishment of such actions and to provide mechanism for investigation,
prosecution and trial of offences and for matters connected therewith or ancillary thereto;
AND WHEREAS the National Assembly stands dissolved and the President is satisfied that the
circumstances exist which render it necessary to take immediate action;
Now, THEREFORE, in exercise of the powers conferred by clause (1) of Article 89 of the
Constitution of the Islamic Republic of Pakistan and inexercise of all powers enabling in that behalf, the
President is pleased to make and promulgate the following Ordinance :-CHAPTER I
1. Short title, extent application and commencement. -(1) This Ordinance may be called the Prevention of Electronic Crimes Ordinance, 2007.
(2) It extends to the whole of Pakistan.
(3) It shall apply to every person who It shall apply to every person who commits an offence
under this Ordinance irrespective of his nationality or citizenship whatsoever or in any
place outside or inside Pakistan, having detrimental effect on the security of Pakistan or
its nationals or national harmony or any propertyor any electronic system or data located
in Pakistan or any electronic system or data capable of being connected, sent to, used by
or with any electronic system in Pakistan.
(4) It shall come into force at once.
2. Definitions
(1) In this Ordinance, unless there is anything repugnant in the subject or context,–
(a) “access" means gaining access to any electronic system or data held in an
electronic system or by causing the electronic system to perform any function to
achieve that objective;
(b)  “Authority” means the Pakistan Telecommunication Authority established under
section 3 of the Pakistan Telecommunication (Re-organization) Act 1996 (XVII of
1996);
( c)  “Code” means the Code of Criminal Procedure, 1898 (Act Vof 1898);
(d)  “Constitution" means Constitution ofthe Islamic Republic of Pakistan;
(e)  “data” means representations of information or of concepts that are being
prepared or have been prepared in a form suitable for use in an electronic system
including but not limited to computer program, text, images, sound, video and
information within a database or electronic system;
(f)  “decision of the Authority" means decision given, determination made or order
passed by the Authority under any of the provisions of the Pakistan
Telecommunication (Re-organization) Act 1996 ( XVII of 1996) on any matter
related to one or more licensed operators in pursuant to the powers conferred
upon the Authority by any other law, rules, regulation or directive for the time
being in force which includes any interim order passed by the Authority pending
final decision;
(g)  “Electronic Certification Accreditation Council" means the council established
under section 18 of the Electronic Transaction Ordinance 2002 (LI of 2002);
(h)  “electronic" includes but not limited to electrical, digital, analogue, magnetic,
optical, biochemical, electrochemical, electromechanical, electromagnetic,
radioelectric or wireless technology;
(i)  “electronic device" means any hardware which performs one or more specific
functions and operates on any form or combination of electrical energy.
(j)  “electronic mail message" means any data generated by an electronic system for
a unique electronic mail address;
(k)  “electronic mail address" means a destination, commonly expressed as a string of
characters, consisting of a unique user or group name or mailbox, commonly
referred to as the local part, and a reference to an internet or intranet domain,
commonly referred to as the domain part, whether or not displayed, to which an
electronic mail message can be sent or delivered or originated from and includes
an electronic mail address which may be permanent, dynamic or disposable;
(l)  “electronic system” means any electronic device or a group of interconnected or
related devices, one or more of which, pursuant to a program or manual or any
external instruction, performs automatic processing of information or data and
may also include a permanent, removable or any other electronic storage
medium;
(m)  “encrypted data" means data which has been transformed or scrambled from its
plain version or text to an unreadable or incomprehensible format and is
recoverable by an associated decryption or decoding technique, regardless of
the technique utilized for such transformation or scrambling and irrespective of
the medium in which such data occurs or can be found for the purposes of
protecting such data;
(n)  “function” includes logic, control, arithmetic, deletion, storage and retrieval and
communication or telecommunication to, from or within an electronic system;
(o)  “Interpol” means International Criminal Police Organisation;
(p) “offence” includes,
(i) an offences punishable under this Ordinance;
(ii) an offence punishable under the laws mentioned in the schedule;
or
(iii) any other offence punishable under any other law for the time being in
force if committed through or by using any computer, electronic system;
electronic means or electronic device as a mean or tool;
(q)  “plain version" means original data before it has been transformed or scrambled
to an unreadable or incomprehensible format or after it has been recovered by
using any decryption or decoding technique;
( r)  “rules” means rules made under this Ordinance;
(s) “Schedule”means the Schedule to this Ordinance;
(t) “sensitive electronic system" means an electronic system used directly in
connection with or necessary for,-(i) the security, defence or international relations of Pakistan;
(ii) the existence or identity of a confidential source of information relating to
the enforcement of criminal law;
(iii) the provision of services directly related to communications infrastructure,
banking and financial services, public utilities, courts, public
transportation, public key infrastructure, payment systems infrastructure
or e-commerce infrastructure;
(iv) the protection of public safety including systems related to essential
emergency services such as police, civil defence and medical services;
(v) the purpose declared as such by the Federal Government in accordance
with the prescribed procedure; or
(vi) containing any data or database protected as such, by any other law.
(u)  “service provider” includes but not limited to,-(i) a person acting as a service provider in relation to sending, receiving,
storing or processing of electronic Communication or the provision of
other services in relation to electronic communication through any
electronic system;
(ii) a person who owns, possesses, operates, manages or controls a public
switched network or provides telecommunication services;
or
(iii) any other person who processes or stores data on behalf of such
electronic communication service or users of such service;
(v)  “subscriber information” means any information contained in any form that is held
by a service provider, relating to subscriber's services other than traffic data and
by which can be established,-(i) the type of communication service used, the technical provisions taken
thereto and the period of service;
(ii) the subscriber's identity, postal, geographic electronic mail address,
telephone and other access number, billing and payment information,
available on the basis of the service agreement or arrangement; or
(iii) any other information on the site of the installation of communication
equipment, available on the basis of the service agreement or
arrangement;
(w)  “traffic data" means any data relating to a communication by means of an
electronic system, generated by an electronic system that formed a part in the
chain of communication, indicating the communication's origin, destination, route,
time, date, size, duration, or type of underlying service;
(x) “Tribunal” means the Information and Communication Technologies Tribunal
constituted under section 3l; and
(y)  “unauthorized access” means access of anykind by any person to any electronic
system or data held in an electronic system or electronic device, without authority
or in excess of authority, if he is not himself entitled to control access of the kind
in question to the electronic system or electronic device, or data and he does not
have consent to such access from any person, so entitled.
CHAPTER - II
OFFENCES AND PUNISHMENTS
3. Criminal access.-Whoever intentionally gains unauthorized access to the whole or any part of an electronic system
or electronic device with or without infringing security measures, shall be punished with
imprisonment of either description for a term which may extend to two years, or with fine not
exceeding three hundred thousand rupees, or with both.
4. Criminal data access.-Whoever intentionally causes any electronic system or electronic device to perform any function
for the purpose of gaining unauthorized access to any data held in any electronic system or
electronic device or on obtaining such unauthorized access shall be punished with imprisonment
of either description for a term which may extend to three years, or with fine or with both.
5. Data damage.-Whoever with intent to illegal gain or cause harm to the public or any person, damages any data
shall be punished with imprisonment of either description for a term which may extend to three
years, or with fine, or with both.
Explanation - For the purpose of this section the expression "data damage" includes but not
limited to modifying, altering, deleting, deterioration, erasing, suppressing,
changing location of data or making data temporarily or permanently unavailable,
halting electronic system, choking the networks or affecting the reliability or
usefulness of data.
6. System damage.-Whoever with intent to cause damage to the public or any person interferes with or interrupts or
obstructs the functioning, reliability or usefulness of an electronic system or electronic device by
inputting, transmitting, damaging, deleting, altering, tempering, deteriorating or suppressing any
data or services or halting electronic systemor choking the networks shall be punished with
imprisonment of either description for a term which may extend to three years, or with fine, or with
both.
Explanation- For the purpose of this section the expression "services" include any kind of
service provided through electronic system.
7. Electronic fraud.-Whoever for wrongful gain interferes with or uses any data, electronic system or electronic device
or induces any person to enter into a relationship or with intent to deceive any person, which act
or omission is likely to cause damage or harm to that person or any other person shall be
punished with imprisonment of either description for a term which may extend to seven years, or
with fine, or with both.
8. Electronic forgery.-Whoever for wrongful gain interferes with data, electronic system or electronic device, with intent
to cause damage or injury to the public or to any person, or to make any illegal claim or title or to
cause any person to part with property or to enter into any express or implied contract, or with
intent to commit fraud by any input, alteration, deletion, or suppression of data, resulting in
unauthentic data with the intent that it be considered or acted upon for legal purposes as if it were
authentic, regardless of the fact that the data is directly readable and intelligible or not shall be
punished with imprisonment of either description for a term which may extend to seven years, or
with fine or with both.
9. Misuse of electronic system or electronic device.-(1) Whoever produces, possesses, sells, procures, transports, imports, distributes or
otherwise makes available an electronic systemor electronic device, including a computer
program, designed or adapted primarily for the purpose of committing any of the offences
established under this Ordinance or a password, access code, or similar data by which
the whole or any part of an electronic system or electronic device is capable of being
accessed or its functionality compromised or reverse engineered, with the intent that it be
used for the purpose of committing any of the offences established under this Ordinance,
is said to commit offence of misuse of electronic system or electronic devices:
Providedthat the provisions of this section shall not apply to the authorized testing or
protection of an electronic system for any lawful purpose.
(2) Whoever commits the offence described in sub-section (1) shall be punishable with
imprisonment of either description for a term which may extend to three years, or with
fine. or with both.
10. Unauthorized access to code.-Whoever discloses or obtains any password, access as to code, system design or any other
means of gaining access to any electronic system or data-with intent to obtain wrongful gain, do
reverse engineering or cause wrongful loss to any person or for any other unlawful purpose shall
be punished with imprisonment of either description for a term which may extend to three years, or
with, or with both.
11. Misuse of encryption.-Whoever for the purpose of commission of an offence or concealment of incriminating evidence,
knowingly and willfully encrypts any incriminating communication or data contained in electronic
system relating to that crime or incriminating evidence, commits the offence of misuse of
encryption shall be punished with imprisonment of either description for a term which may extend
to five years, or with fine, or with both.
12. Malicious code.-(1) Whoever willfully writes, offers, makes available, distributes or transmits malicious code
through an electronic system or electronic device, with intent to cause harm to any
electronic system or resulting in the corruption, destruction, alteration, suppression, theft
or loss of data commits the offence of malicious code:
Providedthat the provision of this section shall not apply to the authorized testing,
research and development or protection of an electronic system for any lawful purpose.
Explanation-For the purpose of this section the expression “malicious code" includes but
not limited to a computer program or a hidden function in a program that damages data or
compromises the electronic system's performance or uses the electronic system
resources without proper authorization, with or without attaching its copy to a file and is
capable of spreading over electronic system with or without human intervention including
virus, worm or Trojan horse.
(2) Whoever commits the offence specified in sub-section (1) shall be punished with
imprisonment of either description for a term which may extend to five years, or with fine
or with both.
13. Cyber Stalking.-(1) Whoever with intent to coerce, intimidate or harass any person uses computer, computer
network, internet, networksite, electronic mail or any other similar means of
communication to:
(a) communicate obscene, vulgar, profane, lewdl lascivious, or indecent language,
picture or image;
(b) make any suggestion or proposal of an obscene nature:
(c) threaten any illegal or immoral act;
(d) take or distribute pictures or photographs of any person without his consent or
knowledge;
(e) display or distribute information in a manner that substantially increases the risk
of harm or violence to any other person, commits the offence of cyber stalking.
(2) Whoever commits the offence specified in sub-section (1) shall be punishable with
imprisonment of either description for a term which may extend to seven years or with fine
not exceeding three hundred thousand rupees, or with both:
Providedif the victim of the cyber stalking under sub-section (1 ) is a minor the
punishment may extend to ten years or with fine not less than one hundred thousand
rupees, or with both.
14. Spamming.-(1) Whoever transmits harmful, fraudulent, misleading, illegal or unsolicited electronic
messages in bulk to any person without the express permission of the recipient, or causes
any electronic system to show any such message or involves in falsified online user
account registration or falsified domain name registration for commercial purpose commits
the offence of spamming.
(2) Whoever commits the offence of spamming as described in sub-section (1) shall be
punishable with fine not exceeding fifty thousand rupees if he commits this offence of
spamming for the first time and for every subsequent commission of offence of spamming
he shall be punished with imprisonment of three months or with fine, or with both.
15. Spoofing.-(1) Whoever establishes a website, or sends an electronic message with a counterfeit source
intended to be believed by the recipient or visitor or its electronic system to be an
authentic source with intent to gain unauthorized access or obtain valuable information
which later can be used for any unlawful purposes commits the offence of spoofing.
(2) Whoever commits the offence of spoofing specified in sub-section (1) shall be punished
with imprisonment of either description for a term which may extend to three years, or with
fine, or with both.
16. Unauthorized interception.-(1) Whoever without lawful authority intercepts by technical means, transmissions of data to,
from or within an electronic system including electromagnetic emissions from an
electronic system carrying such data commits the offence of unauthorized interception.
(2) Whoever commits the offence of unauthorized interception described in sub-section (1)
shall be punished with imprisonment of either description for a term which may extend to
five years, or with fine not exceeding five hundred thousand rupees, or with both.
17. Cyber terrorism.-(1) Any person, group or organization who, with terroristic intent utilizes, accesses or causes
to be accessed a computer or computer network or electronic system or electronic device
or by any available means, and thereby knowingly engages in or attempts to engage in a
terroristic act commits the offence of cyber terrorism.
Explanation 1.- For the purposes of this section the expression "terroristic intent" means
to act with the purpose to alarm, frighten, disrupt, harm, damage; or carry out an act of
violence against any segment of the population, the Government or entity associated
therewith.
Explanation 2.- For the purposes of this section the expression "terroristic act" includes
but is not limited to:
(a) altering by addition, deletion, or change orattempting to alter information that may
result in the imminent injury, sickness, or death to any segment of the population;
(b) transmission or attempted transmission of a harmful program with the purpose of
substantially disrupting or disabling any computer network operated by the
Government or any public entity;
(c) aiding the commission of or attempting to aid the commission of an act of
violence against the sovereignty of Pakistan, whether or not the commission of
such act of violence is actually completed; or
(d) stealing or copying, or attempting to steal or copy, or secure classified information
or data necessary to manufacture any form of chemical, biological or nuclear
weapon, or any other weapon of mass destruction.
(2) Whoever commits the offence of cyber terrorism and causes death of any person shall be
punishable with death or imprisonment for life, and with fine and in any other case he shall
be punishable with imprisonment of either description for a term which may extend to ten
years, or with fine not less than ten million rupees or with both.
18. Enhanced punishment for offences involving sensitive electronic systems.-(1) Whoever causes criminal access to any sensitive electronic system in the course of the
commission of any of the offences established for that offence, under this Ordinance shall,
in addition to the punishment prescribed be punished with imprisonment of either
description for a term which may extend to ten years, or with fine not exceeding one
million rupees, or with both.
(2) For the purposes of any prosecution under this section, it shall be presumed, until
contrary is proved, that the accused had the requisite knowledge that it was a sensitive
electronic system.
19. Of abets, aids or attempts to commits offence.-(1) Any person who knowingly and willfully abets the commission of or who aids to commit or
does any act preparatory to or in furtherance of the commission of any offence under this
ordinance shall be guilty of that offence and shall be liable on, conviction to the
punishment provided for the offence.
(2) Any person who attempts to commit an offence under this Ordinance shall be punished
for a term which may extend to one-half of the longest term of imprisonment provided for
that offence.
Explanation- For aiding or abetting an offence to be committed under this section, it is immaterial
whether the offence has been committed or not.
20. Other offences.-Whoever commits any offence, other than those expressly provided under this Ordinance, with the
help of computer, electronic system, electronic device or any other electronic means shall be
punished, in addition to the punishment provided for that offence, with imprisonment of either
description for a term which may extend to two years, or with fine not exceeding two hundred
thousand rupees, or with both.
2I. Offences by corporate body.-A corporate body shall beheld liable for an offence under this Ordinance if the offence is
committed on its instructions or for its benefit. The corporate body shall be punished with fine not
less than one hundred thousand rupees or the amount involved in the offence whichever is the
higher:
Providedthat such punishment shall not absolve the criminal liability of the natural person who
has committed the offence.
Explanation- For the purposes of this section corporate body, includes a body of persons
incorporated under any law such as trust, waqf, an association, a statutory body or a company.
CHAPTER-III
PROSECUTION AND TRIAL OF OFFENCES
22. Offences to be compoundable and non-cognizable.-
All offences under this Ordinance shall be compoundable, non-cognizable and bailable except the
offences punishable with imprisonment for seven years or more.
23. Prosecution and trial of offences.-(1) The Tribunal shall take cognizance of and try any offence under this Ordinance.
(2) In all matters with respect to which no procedure has been provided in this Ordinance or
the rules made thereunder, the provisions of the Code shall, mutatis mutandis, apply for
the trial.
(3) All proceedings before the Tribunal shall be deemed to be judicial proceedings within the
meanings of sections 193 and 228 of the Pakistan Penal Code 1860 (XLV of 1860) and
the Tribunal shall be deemed to be a Court for the purposes of sections 480 and 482 of
the Code.
24. Order for payment of compensation.-The Tribunal may, on awarding punishment of imprisonment or fine or both for commission of any
offence, make an order for payment of any compensation to the victim for any damage caused to
his electronic system or data by commission ofthe offence and the compensation so awarded
shall be recoverable as arrears of and revenue:
Providedthat the compensation awarded by the Tribunalshall not prejudice any right to a civil
remedy for the recovery of damages beyond the amount of compensation awarded.
CHAPTER IV
ESTABLISHMENT OF INVESTIGATION AND PROSECUTION AGENCIES
25. Establishment of investigation agencies and prosecution.-The Federal Government shall establish a specialized investigation and prosecution cell within
Federal Investigation Agency to investigate and prosecute the offences under this Ordinance:
Providedthat till such time any agency is so established, the investigation and prosecution of an
offence shall be conducted in accordance with the provisions of the Code:
Provided furtherthat any police officer investigating an offence under this Ordinance may seek
assistance of any special investigation agency for any technical input, collection and preservation
of evidence.
26. Powers of officer.-(1) Subject to obtaining search warrant an investigation officer shall be entitled to,
(a) have access to and inspect the operation of any electronic system,.
(b) use or cause to be used any such electronic system to search any data contained
in or available to such electronic system:
(c) have access to or demand any information, code or technology which has the
capability of retransforming or unscrambling encrypted data contained or
available to such electronic system into readable and comprehensible format or
plain version;
(d) require any person by whom or on whose behalf, the investigating officer has
reasonable cause to believe, any electronic system has been used;
(e) require any person having charge of, or otherwise concerned with the operation of
such electronic system to provide him reasonable technical and other assistance
as he may require for the purposes of clauses (a), (b) and (c);
(f) require any person who is in possession of decryption information of under
investigation electronic system , device or data to grant him access to such
decryption information necessary to decrypt data required for the purpose of
investigating any such offence.
Explanation- Decryption information means information or technology that
enables a person to readily retransform or unscramble encrypted data from its
unreadable and from cipher text to its plain text.
(2) The police officer may, subject to the proviso, require a service provider to submit
subscriber information relating to such services in respect of a person under investigation
in that service provider's possession or control necessary for the investigation of the
offence:
Providedthe investigating officer shall get prior permission to investigate any service
provider from the licensing authority where prior permission of the licensing authority is
required under any law to investigate the licensed service provider.
(3) Any person who obstructs the lawful exerciseof the powers under sub-sections (1) or (2)
shall be liable to punishment with imprisonment of either description for a term which may
extend to one year, or with fine not exceeding one hundred thousand rupees, or with both.
27. Real-time collection of traffic data.-(1) The Federal Government may require a licensed service provider, within its existing or
required technical capability, to collect or record through the application of technical
means or to cooperate and assist any law enforcement or intelligence agency in the
collection or recording of traffic data or data, in real-time, associated with specified
communications transmitted by means of an electronic system.
(2) The Federal Government may also require the service provider to keep confidential the
fact of the execution of any power provided for in this section and any information relating
to it.
28. Retention of traffic data.-(1) A service provider shall, within its existing or required technical capability, retain its traffic
data minimum for a period of ninety days and provide that data to the investigating agency
or the investigating officer when required. The Federal Government may extend the
period to retain such data as and when deems appropriate:
(2) The service providers shall retain the traffic data under sub-section (1)by fulfilling all the
requirements of data retention and its originality as provided under sections 5 and 6 of the
Electronic Transactions Ordinance 20O2 ( LI of 2002).
(3) Any person who contravenes the provisions of this section shall be punished with
imprisonment for a term of six months or with fine or with both.
29. Trans-border access.-For the purpose of investigation the Federal Government or the investigation agency may, without
the permission of any foreign Government or international agency access publicly available
electronic system or data notwithstanding the geographically location of such electronic system or
data, or access or receive, through an electronic system, data located in foreign country or
territory if it obtains the lawful and voluntary consent of the person who has the lawful authority to
disclose it:
Providedthat such access is not prohibited under the law of the foreign Government or the
international agency:
Provided furtherthat the investigating agency shall inform in writing to the Ministry of Foreign
Affairs of Government of Pakistan and other relevant agencies as the case may be about the
investigation conducted under this section.
CHAPTER-V
INTERNATIONAL COOPERATION
30. International co-operation.-(1) The Federal Government may cooperate with any foreign Government, lnterpol or any
other international agency with whom it has or establishes reciprocal arrangements for the
purposes of investigations or proceedings concerning offences related to electronic
system and data, or for the collection of evidence in electronic form of an offence or
obtaining expeditious preservation and disclosure of traffic data or data by means of a
electronic system or real-time collection of traffic data associated with specified
communications or interception of data.
(2) The Federal Government may, without prior request, forward to such foreign Government,
Interpol or other international agency, any information obtained from its own investigations
if it considers that the disclosure of such information might assist the other Government or
agency in initiating or carrying out investigations or proceedings concerning any offence.
(3) The Federal Government may require the foreign Government, Interpol or other
international agency to keep the information provided confidential or use it subject to
some conditions.
(4) The investigating agency shall, subject to approval of the Federal Government, be
responsible for sending and answering requests for mutual assistance, the execution of
such requests or their transmission to the authorities competent for their execution.
(5) The Federal Government may refuse to accede to any request made by such foreign
Government, Interpol or international agency if the request concerns an offence which is
likely to prejudice its sovereignty, security, public order or other essential interests.
(6) The Federal Government may postpone action on a request if such action would prejudice
investigations or proceedings conducted by its investigation agency.
CHAPTER-VI
INFORMATION AND COMMUNICATION TECHNOLOGIES TRIBUNAL
31. Information and Communication Technologies Tribunal.-(1) As soon as possible after the commencement of this Ordinance, the Federal Government
shall, by notification in the official Gazette, constitute the Information and Communication
Technologies Tribunal whose principal seat shall be at Islamabad.
(2) The Tribunal may hold its sittings at such place or places as the Federal Government may
decide.
(3) The Tribunal shall consist of a chairman and as many members as the Federal
Government may determine but not more than seven members.
(4) The Chairman may constitute Benches ofthe Tribunal and unless otherwise directed by
him a Bench shall consist of not less than two members. A Bench shall exercise Such
powers and discharge such functions as may be prescribed. There shall be established at
least one Bench in each province.
(5) The Federal Government shall appoint the Chairman and members of the Tribunal.
32. Qualifications for appointment. -(1) A person shall not be qualified for appointment as Chairman unless he is, or has been, or
is qualified for appointment as a judge of the High Court.
(2) A person shall not be qualified for appointment as a Member unless he
(a) has for two years served as a District and Sessions Judge;
(b) has for a period of not less than ten years been an advocate of a High Court; or
(c) has special knowledge of legislation and professional experience of not less than
ten years in the field of telecommunication and information technologies.
33. Salary and allowances, and other terms and conditions of services.-The salary allowances, privileges, and the other terms and conditions of service of the Chairman
and member of the Tribunal shall be such as the Federal Government may, by notification in
official Gazette, determine.
34. Resignation and removal.-
(1) The Chairman or a member of the Tribunal may, by writing under his hand addressed to
the Federal Government resign his office:
Providedthat the Chairman or a member shall, unless he is permitted by the Federal
Government to relinquish his office sooner, continue to hold office until the expiry of three
months from the date of receipt of such resignation or until a person duly appointed as his
success or enters upon his office whichever is earlier.
(2) The Chairman or a member of the Tribunal shall not be removed from his office before the
expiry of term specified in section 33, bythe Federal Government except as. may be
prescribed.
(3) The Federal Government may, by rules, regulate the procedure for the investigation of
misconduct or physical or mental incapacity of the Chairman and a member of the
Tribunal.
35. Saving Tribunal's proceedings.-No act or proceedings of the Tribunal shall be called in question in any manner on the ground
merely of any defect in the constitution of the Tribunal.
36. Employees of the Tribunal.-(1) The Federal Government shall provide the Tribunal with such employees As the
Government may deem appropriate in consultation with the Chairman of the Tribunal.
(2) The employees of the Tribunal shall perform their duties under general superintendence
of the Chairman of the Tribunal.
(3) The salaries, allowances and other conditionsof service of the employees of the ICT
Tribunal shall be such as may be prescribed by the Federal Government.
37. Right to legal representation.-The parties in appeal may either appear in person or authorize one or more legal practitioners,
and in case of a corporate body any of its officers, to present the case before the Tribunal.
38. Amicus curiae. -(1) The Tribunal may, if it so requires, be assisted in technical aspects in any case by an
amicus curiaehaving knowledge and experience in information communication
technologies, finance and economics.
(2) The Federal Government shall maintain a list of amicus curiaehaving relevant
qualifications and experience.
(3) The Tribunal in consultation with the Federal Government shall determine the
remuneration of the amicus curiaeand the Tribunal may decide the party or parties to pay
such remuneration, keeping in view the circumstances of each case.
39. Procedure and powers of Tribunal.-(1) Subject to the provisions of this Ordinance and the rules made thereunder, the Tribunal, -(i) may, where it deems necessary, apply the procedures as provided in the Code or,
as the case may be, in the Code of Civil Procedure, 1908 (Act V of 1908);
(ii) In the exercise of its civil jurisdiction, shall have powers vested in the civil court
under the Code of Civil Procedure, 1908; and
(iii) In the exercise of its criminal jurisdiction, shall have the same powers as are
vested in the Court of Session under the Code.
40. Appeal to Tribunals.-(1) Any person aggrieved by any of the following orders may, within fifteen days from the date
of such order, prefer an appeal to the Tribunal, namely:-
(a) any decision of the Authority; or
(b)  any decision of the Electronic Certification Accreditation Council:
Providedthat no appeal shall lie to the ICT Tribunal from an order passed by the
Authority or the Electronic Certification Accreditation Council with the consent of the
parties.
(2) Any appeal against a decision of the Authority shall be accompanied by a court fee, -(a) ten thousand rupees where the valuation of the subject matter in issue is not
more than five million rupees;
(b) fifty thousand rupees where the valuation of the subject matter in issue is more
than five million rupees but not more than ten million rupees; and
(c) one hundred thousand rupees where the valuation of the subject matter is more
than ten million rupees.
(3) The appeal filed before the Tribunal under sub-section (1) shall be dealt with by it as
expeditiously as possible and the Tribunal shall dispose of the appeal finally within ninety
days from the date of receipt of the appeal.
41. Powers of Tribunal.-The Tribunal while hearing an appeal under section 40 shall have all the powers as are vested in
the court of first appeal under the Code in exerciseof its civil jurisdiction in respect of appeal
against any decision or order of the Authority orthe Electronic Certification Accreditation Council.
42. Limitation. -The provisions of the Limitation Act, 1908(IX of 1908), shall, mutatis mutandis, apply to the
proceedings of ICT Tribunal.
43. Appeal to High Court.-(1) Any person aggrieved by -(i) any decision or order of the Tribunal made under section 40 may prefer second
appeal to the respective High Court within thirty days from the date of the decision
or order of the Tribunal;
Providedthat appeal under this clause shall lie only if the High Court grants
leave to appeal;
(ii) an order of conviction passed by the Tribunal in respect of any offence under this
Ordinance may prefer an appeal to the respective High Court within thirty days of
the decision or order of the Tribunal.
(2) An appeal against an order of the Tribunal under section 40 or an order of sentence
exceeding ten years shall be heard by the Division Bench of the High Court.
44. Civil court not to have jurisdiction.-No court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which
the Tribunal constituted under this Ordinance is empowered by or under this Ordinance to
determine and no injunction shall be granted by any court or other authority in respect of any
action taken or to be taken in pursuanceof any power conferred by or under this Ordinance.
45. Transitory proceedings.-(1) Until the establishmerrt of the Tribunal all cases, proceedings and appeals, subject matter
of which is within the jurisdiction of Tribunal, shall continue to be heard and decided by
the competent forum existing under any law for the tirne being in force.
(2) On the constitution of the Tribunal all cases, proceedings and appeals shall stand
transferred to and heard and disposed of by the Tribunal.
(3) On transfer of cases, proceedings and appeals under sub-section(2), the Tribunal shall
proceed from the stage the proceedings had reached immediately prior to the transfer and
shall not be bound to recall any witness or again record any evidence that may have been
recalled.
CHAPTER VII
MISCELLANEOUS
46. Ordinance to override other laws.-The provisions of this Ordinance shall have effect notwithstanding anything to the contrary
contained in any other law for the time being in force.
47. Power to amend Schedule.-The Federal Government may, by notification in the official Gazette, amend the Schedule so as
add any entry thereto or modifyor omit any entry therein.
48. Powers to make rules.-(1) The Federal Government may, by notification in the official Gazette, make rules for
carrying out purposes of the Tribunal.
49. Removal of difficulties.-If any difficulty arises in giving effect to the provisions of this ordinance, the Federal Government
may, by order published in the official Gazette, make such provisions not inconsistent with the
provisions of this Ordinance as may appear to be necessaryfor removing the difficulty.
THE FIRST SCHEDULE
[See section 3(s)]
1. The Electronic Transactions Ordinance, 2OO2 (LI of 2O02).
2. The Pakistan Telecommunication (Re-organization) Act, 1996( XVII of 1996).
3. The Telegraph Act, 1885 ( XIII of 1885).
4. The Wireless Telegraphy Act, 1933 (XVII of 1933).

Payment Systems and Electronic Fund Transfers Act, 2007

Payment Systems and Electronic Fund Transfers Act, 2007
AN
ACT
to provide regulatory framework for payment systems and electronic fund transfers
WHEREAS it is necessary to supervise and regulate Payment Systems and Electronic Fund
Transfers in Pakistan and to provide standards for protection of the consumer and to determine respective
rights and liabilities of the financial institutions and other Service Providers, their consumers and
participants;
It is hereby enacted as follows:-CHAPTER I
PRELIMINARY
1. Short title, extent and commencement, -(1) This Act may be called the Payment Systems and Electronic Fund Transfers Act, 2007.
(2) It extends to the whole of Pakistan.
(3) It shall come into force at once.
2. Definitions.-(1) In this Act, unless there is anything repugnant in the subject or context,
(a) “Accepted Card”means a card, code or other means of access to a
Consumer’s Account for the purpose of initiating Electronic Fund Transfers;
(b) “Access Code”includes pin, password or code, which provides a means of
access to a Consumer’s Account for the purpose of initiating an Electronic Fund
Transfer;
(c) “Account”means a current deposit, saving deposit, or any other account
maintained by a consumer in a Financial Institution in which credits and debits
may be effected by virtue of Electronic Fund Transfers;
(d) “Authorized”means authorized by the State Bank for the purposes of this Act;
(e) “Automated Teller Machine (ATM) Card”means any card for use at any ATM
to initiate Electronic Fund Transfers.
(f) “Authorized Party”means a bank, a Financial Institution, a Clearing House, a
Service Provider or any person authorized by the State Bank to transact business
under this Act in Pakistan;
(g) “Automated Teller Machine (ATM) Operator”means any person or a Financial
Institution operating any ATM at which consumers initiate Electronic Fund
Transfers;
(h) “Bank”means a banking company as defined in section 5 of the Banking
Companies Ordinance, 1962 (LVII of 1962);
(i) “Book Entry Government Securities”means any securities issued by the
Government under any written law transferable by a book entry on a register or
otherwise;
(j) “Business Day”means any day on which offices of consumers, Financial
Institutions, operators or Service Providers involved in Electronic Fund Transfer
are open to the public;
(k) “Card”means any card including an ATM card, Electronic Fund Transfer point
of sale card, debit card, credit card or stored value card, used by a Consumer to
effect an Electronic Fund Transfer;
(l) “Cheque in the Electronic Form”means a cheque which contains the exact
image of a paper cheque in electronic form and is generated, written and signed
in a secure system ensuring minimum safety standards as may be prescribed by
the State Bank;
(m) “Clearing House”means corporation, company, association, partnership,
agency or other entity that provides clearing or settlement services for a
Payment System;
(n) “Consumer”means any person who or which avails the facility of Electronic
Fund Transfer;
(o) “Debit Instrument”means a Card, Access Code, or other device other than a
cheque, draft or similar paper instrument, by the use of which a person may
initiate an Electronic Fund Transfer;
(p) “Designated Payment Instrument”means a Payment Instrument designated by
the State Bank as Payment Instrument under section 12.
(q) “Designated Payment System” means a Payment System designated by the
State Bank under section 4 to be a Designated Payment System for the
purposes of this Act;
(r) “Electronic” has the same meaning as assigned to it by the Electronic
Transactions Ordinance, 2002 (LI of 2002);
(s) “Electronic Fund or Electronic Money”means money transferred through an
Electronic Terminal, ATM, telephone instrument, computer, magnetic medium or
any other electronic device so as to order, instruct or authorize a banking
company, a Financial Institution or any other company or person to debit or
credit an account and includes monetary value as represented by a claim on the
issuer which is stored in an electronic device or Payment Instrument, issued on
receipt of funds of an amount not less in value than the monetary value issued,
accepted as means of payment by undertakings other than the issuer and
includes electronic store of monetary value on a electronic device that may be
used for making payments or as may be prescribed by the State Bank;
(t) “Electronic Fund Transfer”means any transfer of funds, other than a
transaction originated by cheque, draft or similar paper instrument, which is
initiated through an Electronic Terminal, telephonic instrument, point-of -sale
Terminal, stored value card Terminal, debit card, ATM, computer magnetic tape
or any other electronic device so as to order, instruct, or authorize a Financial
Institution to debit or credit an Account;
(u) “Electronic Money Institution”means an undertaking, that issues means of
payment in the form of Electronic Money and is duly authorized to do so;
(v) “Electronic Payment System”means implementation of Payment System
Electronically;
(w) “Electronic Terminal”means an electronic device, operated by a consumer,
through which a consumer may initiate an Electronic Fund Transfer;
(x) “Financial Institution”means a financial institution as defined in the Financial
Institutions (Recovery of Finances) Ordinance, 2001(XLVI of 2001) and includes
a banking company or any other Electronic Money Institution or person,
authorized by the State Bank in this behalf, that directly or indirectly holds an
account belonging to a consumer.
(y) “Government”means the Federal Government or any Provincial Government;
(z) “Netting”means the conversion into one net claim or one net obligation of
claims and obligations resulting from transfer orders which a participant either
issues to, or receives from, one or more other participants with the result that
only a net claim can be demanded or a net obligation be owed;
(za) “Operator”means any financial or other institution or any person, authorized by
the State Bank to operate any Designated Payment System;
(zb) “Participant”means a party to an arrangement that establishes a Payment
System;
(zc) “Payment Instrument”means any instrument, whether tangible or intangible,
that enables a person to obtain money, goods or services or to otherwise make
payment; but excludes Payment Instruments prescribed in Negotiable Instrument
Act, 1881(XXVI of 1881);
(zd) “Payment System”inter-alia means a system relating to payment instruments,
or transfer, clearing, payment settlement, supervision, regulation or infrastructure
thereof and includes clearing, settlement or transfer of Book Entry Government
Securities;
(ze) “Person”includes a legal person or a body of persons whether incorporated or
not.
(zf) “Preauthorized Electronic Fund Transfer”means an Electronic Fund Transfer
Authorized in advance;
(zg) “Prescribed”means prescribed by rules, circulars, directions, orders or
bye-laws.
(zh) “Real Time Gross Settlement System”means a Payment System which can
effect final settlement of funds, paymentobligations and Book Entry Government
Securities and instruments on a continuous basis during such operating hours of
a processing day as the State Bank may determine on a
transaction-by-transaction basis;
(zi) “Service Provider”includes an operator or any other Electronic Fund Transfer
Service Provider.
(zj) “State Bank”means the State Bank of Pakistan established under section 3 of
the State Bank of Pakistan Act, 1956 (XXXIII of 1956);
(zk) “Systemic Risk”means the risk that relates to the inability of a participant to
meet its obligations in the Payment System as they become due or a disruption to
the Payment System that could, for whatever reason, cause other participants in
the Payment System to be unable to meet their obligations as they become due;
and
(zl) “Truncated Cheque”means a cheque which is truncated in a securesystem,
during the course of a clearing cycle, byan Authorized Party, whether paying or
receiving payment, immediately on capture of a scanned image, substituting
physical movement of the cheque in the original form, and includes a cheque in
the electronic form.
3. Powers of the State Bank.-(1) The State Bank may, generally in respect of this Act, or in respect of any particular
provision of this Act, or generally in respect of payment systems, the conduct of all or any
of the Service Providers, Operators of Payment Systems or issuers of Payment
Instruments, issue such rules, guidelines, circulars, bye-laws, standards or directions as it
may consider appropriate.
(2) The State Bank may, by written notice, require an operator of a Designated Payment
System or issuer of Designated Payment Instrument to make modifications or alterations
to –
(i) the Designated Payment System or Designated Payment Instrument including
governance arrangements;
(ii) operational arrangements;
(iii) documents and information submitted by operator of a Payment System or issuer
of Payment Instruments;
(iv) any other documents relating to the Designated Payment System or Designated
Payment Instrument.
(3) In exercising its powers under sub-section (1), the State Bank shall have regard to-(i) the Systemic Risk;
(ii) the object of the State Bank to promote monetary stability and a sound financial
structure;
(iii) the interest of the public including market conditions and behaviour;
(iv) the safety, integrity, efficiency or reliability of the Designated Payment System or
Designated Payment Instrument including security and operating standards and
infrastructure arrangements;
(v) the interests of the current Participants of the Designated Payment System or
users of the Designated Payment Instruments; or
(vi) the interests of persons who, in the future, may want access to the Designated
Payment System or may want to use the Designated Payment Instrument.
CHAPTER II
Payment Systems And Their Operation
4. Designation of Payment System.-(1) The State Bank may, if it finds it to be necessary in the public interest, by a written order
designate a Payment System as a Designated Payment System.
(2) The State Bank may, in considering whether to designate a Payment System as a
Designated Payment System, inspect the premises, equipment, machinery, apparatus,
books or other documents, or accounts and transactions relating to the Payment System.
5 Revocation of Designation of Payment System.-(1) The State Bank may revoke the designation of a Designated Payment System if it is
satisfied that –
(i) the Designated Payment System has ceased to operate effectively as a
Payment System;
(ii) the operator of the designated system has knowingly furnished information or
documents to the State Bank in connection with the designation of the Payment
System which is or are false or misleading in any material particular;
(iii) the operator or settlement institution of the Designated Payment System is in the
course of being wound up or otherwise dissolved, whether in Pakistan or
elsewhere;
(iv) any of the terms and conditions of the designation or requirements of this Act has
been contravened; or
(v) the State Bank considers that it is in the public interest to revoke the designation.
(2) The State Bank shall not revoke a designation without giving the operator of the
Designated Payment System an opportunity to be heard.
Providedthat the State Bank may, if an immediate systemic risk is involved, suspend the
designation of a Payment System without notice pending the final order.
6. Real Time Gross Settlement (RTGS) System.-(1) The State Bank may establish and operate one or more Real Time Gross Settlement
Systems for the transfer of funds and settlement of payment obligations as approved by it.
(2) A settlement system may be linked to another Payment System in Pakistan or elsewhere
for the clearing or settlement of payment obligations, securities or instruments, whether
or not such Payment System is operated on a real time gross settlement basis.
(3) The State Bank may enter into agreements with participants of a settlement system and
issue to the participants, in writing, rules for the operation of the settlement system.
(4) The State Bank may, if it considers it necessary in the interest of the Payment System,
stop or suspend the operation of the Payment System or stop or suspend the privileges or
right of any participant or class of participants;
(5) Without prejudice to the generality of sub-section (3), the rules provided for in the said
sub-section, may provide-(i) for the conduct of participants;
(ii) for the authentication of transactions carried out electronically;
(iii) for the appointment of auditors or inspectors for the auditing or inspection of the
operating systems of participants in respect of the settlement system; and
(iv) for the payment of fees to the State Bank.
7. Requirement For Retention of Electronic Record.-Financial Institutions or other Authorized Parties providing funds transfer facility shall be required
to retain complete record of electronic transactions in electronic form in the same manner as
provided in section 6 of the Electronic Transactions Ordinance, 2002 (LI of 2002) for a period as
may be determined by the State Bank.
8. Disqualification of Staff.-(1) No person shall be appointed to serve in any capacity by an operator of a Designated
Payment System if –
(i) such person has been adjudged a bankrupt, or has suspended payments, or has
compounded a debt with his creditors, whether in or outside Pakistan, within ten
years prior to the date of the appointment; or
(ii) such person has been convicted of an offence under this Act or committed any
other offence involving moral turpitude or such an offence has been compounded
against him.
(2) Any person being the chairman, director, chief executive, by whatever name called, or
official liquidator, or an officer of a designated payment system mismanages the affairs of
the payment system or misuses his position for gaining direct or indirect benefit for himself
or any of his family members or any otherperson, shall be disqualified to serve in any
capacity in a designated payment system.
9. Effect of Disqualification.-(1) Where a person becomes disqualified, as provided for in the foregoing provisions, after
his appointment –
(i) he shall immediately cease to hold office; and
(ii) the operator of the Designated Payment System shall immediately terminate his
appointment.
(2) Any person disqualified under section 8, notwithstanding any contract of service, shall not
be entitled to claim any compensation for his loss of office or termination of appointment.
10. Governance Arrangements.-The operator of a Designated Payment System shall establish adequate governance
arrangements which are effective, accountable and transparent or which may be required by the
State Bank to ensure the continued integrity of such Designated Payment System.
11. Operational Arrangement.-An Operator of a Designated Payment System shall establish the following operational
arrangements:
(i) rules and procedures setting out the rights and liabilities of the operator and the
participant and the financial risks the participants may incur;
(ii) procedures, controls and measures for the management of credit, liquidity and settlement
risk, including rules determining the time when a payment instruction and a settlement is
final;
(iii) criteria for participation in the Designated Payment System; and
(iv) measures to ensure the safety, security and operational reliability of the Designated
Payment System including contingency arrangements.
CHAPTER III
Payment Instruments
12. Designation of Payment Instrument.-(1) Where the State Bank is of the opinion that
(i) a Payment Instrument is or may be in widespread use as a means of making
payment and may affect the Payment Systems of Pakistan; and
(ii) it is necessary to protect the interest ofthe public or it is necessary to maintain
the integrity, efficiency and reliability of a Payment Instrument, the State Bank
may prescribe such Payment Instrument as a Designated Payment Instrument.
(2) Where a Payment Instrument is prescribed as a Designated Payment Instrument, the
issuer of such Designated Payment Instrument shall comply with the requirements of
section 13 within such period as the State Bank may specify.
13. Issuing of Designated Payment Instruments.-(1) No person shall be issued a Designated Payment Instrument unless the issuer has –
(i) complied with the requirements of this Act;
(ii) submitted to the State Bank the documents and information as may be
prescribed thereby;
(iii) paid the fee Prescribed by the State Bank; and
(iv) obtained a written approval from the State Bank to issue a Designated Payment
Instrument.
(2) The State Bank may in giving its approval –
(i) require all or any of the documents submitted to be modified and altered as it may
deem necessary; and
(ii) impose such restrictions, limitations or conditions as it may deem fit.
(3) Any Payment Instrument so issued should carry minimum security features to make its
usage secure as per the current international standards.
14. Prohibition of Issuance of Payment Instruments.-(1) The State Bank may, by a written order, prohibit any person from issuing or using any
Payment Instrument if, in its opinion –
(i) the issuing or use of the Payment Instrumentis detrimental to the reliable, safe,
efficient and smooth operation of the Payment Systems of Pakistan or monetary
policy of the State Bank;
(ii) the prohibition is in the interest of the public; or
(iii) the Payment Instrument has been issued with an object to entice or defraud the
public.
(iv) the Person has, in the opinion of the State Bank, failed to comply with the
requirements of this Act.
(2) The State Bank may, in considering whether to prohibit any Person from issuing or using
any Payment Instrument, inspect the premises, equipment, machinery, apparatus, books
or other documents, or accounts and transactions of the issuer of the Payment
Instrument.
(3) Any Person causing or attempting to cause obstruction to an officer or representative of
the State Bank in inspection of the premises or equipment shall, upon complaint made to
a court having jurisdiction, be liable to punishment which may extend to three years
imprisonment of either description or with fine which may extend to five million rupees or
with both.
(4) The State Bank shall before passing an order under this section, give such Person a
reasonable opportunity to make representation before it.
Provided that State Bank may, in appropriate cases, without notice direct a Person to
immediately stop issuing a Payment Instrument, pending the final order.
15. Security.-Financial Institutions and other institutions providing Electronic Funds Transfer facilities shall
ensure that secure means are used for transfer, compliant with current international standards and
as may be prescribed by the State Bank from time to time.
16. Third Party.-If a person other than a Financial Institution is holding a Consumer’s Account, the State Bank shall
by instructions ensure that the disclosures, required to be made for Electronic Fund Transfers,
and the protections, responsibilities and remedies created by this Act, are made applicable to
such Persons and services.
17. Payment by Truncated Cheque.-(1) Notwithstanding anything to the contrary provided in the Negotiable Instruments Act, 1881
(XXVI of 1881), or any other law, for the time being in force, Electronic Fund Transfers
may be initiated by an Authorized Party by means of a truncated cheque.
(2) In case, any transfer of funds takes place in the manner as provided in sub-section (1),
the original cheque shall cease to be negotiable.
(3) Validity of a cheque shall not be affected if for any technical reason or otherwise, transfer
of funds as provided in sub-section (1) fails to take effect.
(4) If transfer of funds does not take effect as provided in sub-section (3), the Bank or the
Authorized Financial Institution concerned may require physical delivery of the cheque
from the originator.
CHAPTER IV
Clearing and Other Obligations
18. Clearing Houses, Audit and Inspection.-(1) The State Bank may nominate one or moreClearing Houses to provide clearing or
settlement services for a Payment System on such terms and conditions as may be
determined by it.
(2) The State Bank may, for the purposes of carrying out its functions under this Act, conduct
audits and inspections of Clearing Houses, and the Clearing House shall, as required,
assist the State Bank to the extent necessary to enable it to carry out an audit or
inspection.
(3) Auditors for carrying out the purposes provided for in sub-section (1) shall be appointed
with prior approval in writing of the State Bank.
19. Notice Required of Significant Changes.-Every Clearing House shall, in respect of its Designated Payment System, provide the State Bank
with reasonable notice of not less than fifteen Business Days in advance of any change to be
made by the Clearing House that is of a significant nature in relation to the Designated Payment
System and, without limiting the generality of the foregoing, the notice shall be provided in respect
of any change affecting –
(a) the legal documents and bye-laws of the Clearing House;
(b) the operation of the Designated Payment System;
(c) the bye-laws, agreements, rules, procedures, guides or other documentation governing
the Designated Payment System;
(d) the composition of a board of directors of the Clearing House due to resignation or
otherwise; or
(e) the appointed auditor of the Clearing House.
20. Participants Responsible Where Clearing House Fails to Comply, etc. .-Where a Clearing House fails to comply with the obligations imposed on it under this Act in
respect of its Payment System or otherwise contravenes the provisions of this Act, the
Participants jointly and severally shall comply with those obligations in the same manner and to
the same extent as if the participants were the Clearing House on which the obligations are
imposed or they committed the contravention.
21. Settlement Provisions.-(1) Notwithstanding anything to the contrary provided in this Act or any other law for the time
being in force, the settlement rules of a Designated Payment System shall be valid and
binding on the operator and the participants and any action may be taken or payment
made in accordance with the settlement rules.
(2) Where the settlement rules of a Designated Payment System provide that the settlement
of a payment obligation through an entry to or a payment out of an Account of a
Participant or a Clearing House at the State Bank is final and irrevocable the entry or
payment shall not be required to be reversed, repaid or set aside.
22. Rights, etc., Not Subject to Stay.-(1) The rights and remedies of a participant, a Clearing House, or the State Bank in respect
of collateral granted to it as security for a payment or the performance of an obligation
incurred in a Designated Payment System may not be the subject of any stay to be
granted by any court or order affecting the ability of creditors to exercise rights and
remedies with respect to the collateral.
23. Settlement Rules.-(1) The State Bank may make “settlement rules” to provide the basis on which payment
obligations are calculated, netted or settled including rules for the taking of action in the
event that a participant is unable or likely to become unable to meet its obligations to the
Clearing House, or to the other participants.
(2) Every participant and Clearing House shall, in respect of its Designated Payment System,
provide the State Bank with such information, at such times and in such form as the State
Bank may require in writing.
24. Electronic Money Institution.-(1) An applicant that wants to become an Electronic Money Institution shall submit an
application to the State Bank for issue of a license to perform Electronic Money activity.
(2) An Electronic Money Institution may perform only such activities as are specified in its
license;
25. Preservation of Rights, etc. .-(1) Except to the extent expressly provided, this Act shall not operate to limit, restrict or
otherwise affect -(i) any right, title, interest, privilege, obligation or liability of a person resulting from
any transaction in respect of a transfer order which has been entered into a
Designated Payment System; or
(ii) any investigation, legal proceeding or remedy in respect of any such right, title,
interest, privilege, obligation or liability.
(2) Nothing in this Act shall be construed to require.
(i) the unwinding of any Netting done by the operator of a Designated Payment
System, whether pursuant to its default arrangements or otherwise;
(ii) the revocation of any transfer order given by a participant which is entered into a
Designated Payment System; or
(iii) the reversal of a payment or settlement made under the rules of a Designated
Payment System.
CHAPTER V
Supervisory Control of the State Bank
26. Issuance of Model Clauses.-The State Bank may issue model clauses for use by the Financial Institutions and Authorized
Parties to facilitate compliance with the disclosure requirements as specified in section 29 and to
aid consumers in understanding the rights and responsibilities of participants in Electronic Fund
Transfers by utilizing readily understandable language.
27. Modification of Requirements.-Instructions issued by the State Bank may provide for such adjustments and exceptions for any
class of Electronic Fund Transfers, as in the opinion of the State Bank are necessary or proper for
the purposes of this Act, to prevent circumvention or evasion thereof, to facilitate compliance
therewith and to alleviate any undue compliance burden on small Financial Institutions.
28. Service Providers Other Than Financial Institutions.-The State Bank shall determine, which provisionsof this Act, subject to any modifications,
adjustments or exceptions as provided for in section 26, shall apply to a person other than a
Financial Institution, holding a Consumer’s Account.
29. Requirement of Notice.-(1) The instructions issued by the State Bank under section 3 shall require any ATM Operator
or any other Service Provider who imposes a fee on any consumer for providing services
to such consumer, to provide notice in accordance with sub-sections (2) and (3) to the
consumer of the fact that –
(i) a fee is imposed by such operator or Service Provider for providing the service;
and
(ii) the amount of any such fee.
(2) The notice required by sub-section (1) with respect to any fee shall be posted at a
prominent and conspicuous location on or atthe ATM or other Electronic Terminal at
which the consumer initiates the Electronic Fund Transfer.
(3) The notice required under sub-section (1) with respect to charging of fee shall appear on
the conspicuous part of the ATM or Electronic Terminal in the manner as may be
determined and notified by the State Bank in this behalf.
(4) No fee may be imposed by any ATM Operator or other Service Provider, as the case may
be, in connection with any Electronic Fund Transfer initiated by a consumer for which a
notice is required under sub-section (1), unless the consumer receives such notice in
accordance with sub-sections (2) and (3) and such consumer elects to continue in the
manner necessary to effect the transaction after receiving such notice.
30. Terms and Conditions of Transfers.-(1) The terms and conditions of Electronic Fund Transfers involving a Consumer’s Account
shall be disclosed by a Financial Institution, operator or other Authorized Party in English
and in a manner clearly understood by the consumer, at the time the Consumer contracts
for an Electronic Fund Transfer service, in accordance with the instructions of the State
Bank.
(2) Such disclosures may include the following, namely:-(i) the Consumer’s liability for unauthorized Electronic Fund Transfers and, at the
option of the Financial Institution or Authorized Party or Operator, notice of the
advisability of prompt reporting of any loss, theft, or unauthorized use of a Card,
Access Code or other means of access;
(ii) the telephone number and address of the Person or office to be notified in the
event the Consumer believes that an unauthorized Electronic Fund Transfer has
been or may be effected;
(iii) the kind and nature of Electronic Fund Transfers which the Consumer may
initiate, including any limitations on the frequency or amount of such transfers;
(iv) any charges for Electronic Fund Transfers or for the right to make such transfers;
(v) the Consumer’s right to stop payment of a Preauthorized Electronic Fund
Transfer and the procedure to initiate such a stop payment order;
(vi) the Consumer’s right to receive information of Electronic Fund Transfers under
section 29;
(vii) a summary, in a form Prescribed by the State Bank, of the error resolution
provisions of section 36 which, the Financial Institutions, Authorized Parties or
Operators shall be required to transmit at least once per calendar year;
(viii) the Financial Institution’s, Authorized Party’s or Operator’s liability to the
Consumer;
(ix) the circumstances under which the Financial Institution, Authorized Party or
Operator will in the ordinary course of business disclose information concerning
the Consumer’s Account to third Persons; and
(x) a notice to the Consumer that a fee may be imposed by an ATM Operator or
Service Provider, if the Consumer initiates a transfer from an ATM or other
Electronic Terminal that is not operated by the Person or the Financial Institution
issuing the Card or other means of access.
31. Notification of Changes.-(1) A Financial Institution or any other Authorized party, shall notify a Consumer in writing or
such other means as may be prescribed by the State Bank from time to time, at least
twenty-one days prior to the effective date of any material change in any term or condition
of the Consumer’s Account required to be disclosed under sub-section (1) of section 29,
unless such change is immediately necessary to maintain or restore the security of an
Electronic Fund Transfer system or a Consumer’s Account.
(2) Financial Institution shall be required to make a subsequent notification, provided for in
sub-section (1), if such a change is made permanent.
CHAPTER VI
Documentation of Transfers
32. Availability of Documentation and Proof.-For each Electronic Fund Transfer initiated by a Consumer from an Electronic Terminal, the
Financial Institution holding such Consumer’s Account shall, directly or indirectly, at the time the
transfer is initiated, make available to the Consumer documentation and proof of such transfer,
clearly setting forth, as may be required by suchtransaction, the following particulars, namely –
(i) the amount involved and the date on which the transfer is initiated;
(ii) the type of transfer;
(iii) the identity of the Consumer’s Account with the Financial Institution from which or to
which funds are transferred;
(iv) the identity of any third party to whom or from whom funds are transferred;
(v) the location or identification of the Electronic Terminal involved; and
(vi) name of the Accountholder from or to which funds are transferred.
33. Periodic Statement.-(1) A Financial Institution shall provide each consumer with a periodic statement for each
account of such consumer that may be accessed electronically.
(2) Such statement shall be provided at least once every month, or as required by the
consumer, or such other period as the State Bank may determine from time to time.
(3) Such statement shall include all the necessary particulars in respect of the Consumer’s
Account and shall clearly set forth the balancesin Consumer’s Account at the beginning
and the close of the period, the amount of any fee or charge assessed by the Financial
Institution during the period, for whatever purpose and the address and telephone number
to be used by the Financial Institution for the purpose of receiving any enquiry or notice of
account error from the Consumer.
34. Documentation as Evidence.-In any action involving a Consumer or any Participant, any documentation required by either
section 31 or 32 of this Act to be given to the Consumer, which indicates that an Electronic Fund
Transfer was made to another Person, shall be admissible as evidence of such transfer and shall
constitute prima facie proof that such transfer was made.
35. Preauthorized Transfers.-(1) A preauthorized Electronic Fund Transfer from a Consumer’s Account may be authorized
by the Consumer either in writing, or in any other accepted form.
(2) A consumer may stop payment of a Preauthorized Electronic Fund Transfer by notifying
the Financial Institution.
CHAPTER VII
Notification of Error
36. Notification of error.-(1) In this section, the following shall be construed as error, namely –
(i) an unauthorized Electronic Fund Transfer;
(ii) an incorrect Electronic Fund Transfer to or from the Consumer’s Account.
(iii) the omission of an Electronic Fund Transfer from a periodic statement;
(iv) a computational or book keeping error made by the Financial Institution relating to
an Electronic Fund Transfer;
(v) the Consumer’s receipt of an incorrect amount of money from an Electronic
Terminal; or
(vi) any other error as determined by the State Bank.
(2) When an error has occurred, the Financial Institution or the Authorized Party shall
investigate the alleged error to determine whether an error has occurred, and report in
writing the result of such investigation to the consumer within ten Business Days.
(3) The Financial Institution may require written confirmation to be provided to it within ten
Business Days of an oral notification of error.
(4) A Financial Institution or Authorized Party shall not be liable to credit a Consumer’s
Account in accordance with the provisions of section 37 in case no error is found pursuant
to investigation under subsection (2) and or the written confirmation required by it is not
received by it within the ten days period, provided for in sub-section (3).
37. Correcting Error.-If the Financial Institution or Authorized Party determines that an error did occur, it shall promptly,
and in no event later than one Business Day after such determination, correct the error, including
the crediting of a Consumer’s Account with mark up where applicable:
Providedthat such investigation shall be concluded not later than ten Business Days after receipt
of notice of the error.
38. Absence of Error.-If the Financial Institution or the Authorized Party determines after its investigation that an error
did not occur, it shall deliver or mail to the consumer an explanation of its findings within three
Business Days after the conclusion of its investigation, and upon request of the consumer
promptly deliver or mail to the consumer copies of all documents which the Financial Institution or
the Authorized Party relied on to conclude that such error did not occur.
39. Triple Damages.-(1) If in any case filed under section 50 of this Act, the court finds that a Financial Institution
and/or an Authorized Party is guilty of the commission of any act, provided for in
sub-section (2) or (3) of this section, the Financial Institution, shall in addition to costs
incurred by the consumer, be further liable to pay to the Consumer, triple damages
determined under section 50.
(2) The Financial Institution or the Authorized Party shall be liable to pay damages, provided
for in sub-section (1), if it did not re-credit a Consumer’s Account within the ten days
period specified in section 37 and the Financial Institution and/ or the Authorized Party
did not make a good faith investigation of the alleged error or it did not have reasonable
basis for believing that the Consumer’s Account was not in error.
(3) The Financial Institution or the Authorized Party shall also be liable to pay damages,
provided in sub-section (1), if it knowingly and willfully concluded that the Consumer’s
Account was not in error when such conclusion could not reasonably have been drawn
from the evidence available to the Financial Institution or the Authorized Party at the time
of its investigation.
CHAPTER VIII
Liability of Parties
40. Consumer’s Liability.-A consumer shall be liable for any unauthorized Electronic Fund Transfer involving the Account of
such consumer only if the card or other means of access utilized for such transfer was an
Accepted Card or other means of access and if the issuer of such card, code or other means of
access has provided a means whereby the user of such card, code or other means of access can
be identified as the person authorized to use it, such as by signature, photograph, or finger print or
by electronic or mechanical confirmation.
41. Burden of Proof.-In any action which involves a consumer’s liability for an unauthorized Electronic Fund Transfer,
the burden of proof shall be upon the Financial Institution or the Authorized Party to show that the
Electronic Fund Transfer was authorized or, if the Electronic Fund Transfer was authorized, then
the burden of proof shall be upon the Financial Institution or the Authorized Party to establish that
the conditions of liability set forth in this Act were met, and the disclosures required to be made to
the consumer under this Act were in fact made in accordance with the provision thereof.
42. Liability in Case of Extension of Credit.-In the event of transaction which involves both an unauthorized Electronic Fund Transfer and an
extension of credit limit pursuant to an agreement between the consumer and the Financial
Institution or the Authorized Party, nothing shall impose liability upon a consumer for an
unauthorized Electronic Fund Transfer in excess of his liability for such transfer under any other
applicable law or under any agreement with the Consumer’s Financial Institution or Authorized
Party.
43. Liability of Financial Institutions/ Authorized Parties.-Subject to what is provided in this section or section 44, a Financial Institution or the Authorized
Party shall be liable to a consumer for all damages proximately caused by –
(i) the Financial Institution’s or Authorized Party’s failure to make an Electronic Fund
Transfer, in accordance with the terms and conditions of an Account, in the correct
amount or in a timely manner when properly instructed to do so by the consumer, except
where-(a) the Consumer’s Account has insufficient funds;
(b) the funds are subject to legal process or other encumbrance restricting such
transfer;
(c) such transfer would exceed an established credit limit;
(d) as otherwise provided in instructions by the State Bank.
(ii) the Financial Institution’s or Authorized Party’s failure to make an Electronic Fund
Transfer due to insufficient funds when the Financial Institution or Authorized Party failed
to credit, in accordance with the terms and conditions of an Account, a deposit of funds to
the Consumer’s Account which would have provided sufficient funds to make the transfer,
and
(iii) the Financial Institution’s or Authorized Party’s failure to stop payment of Preauthorized
transfer from a Consumer’s Account when instructed to do so in accordance with the
terms and conditions of Account.
44. Force Majeure.-A Financial Institution, an Authorized Party, Operator or a Participant shall not be liable under
clauses (i) and (ii) of section 43 if it shows bya preponderance of evidence that its action or failure
to act resulted from –
(i) force majeure or other circumstance beyond its control, that it exercised reasonable care
to prevent such an occurrence, and that it exercised such diligence as the circumstances
required;
(ii) a technical malfunction which was known to the Consumer at the time he attempted to
initiate an Electronic Fund Transfer or, in case of Preauthorized transfer, at the time such
transfer should have occurred
45. Intent.-In case of failure described in clauses (i) and (ii) of section 43 was not intentional and it resulted
from a bona fide error, notwithstanding the maintenance of procedures reasonably adopted to
avoid any such error, the Financial Institution, Authorized Party, operator or the participant shall
be liable for actual damages proved.
46. Prohibition on Improper Issuance.-No person may issue to a Consumer any Card, code or other means of access to such
Consumer’s Account for the purpose of initiating an Electronic Funds Transfer other than in
response to a request or application therefor; or as a renewal of, or in substitution for, an
Accepted Card, code or other means of access, whether issued by the initial issuer or a
successor.
47. Exceptions.-(1) Notwithstanding the provisions of section 46,a person may distribute to a consumer on an
unsolicited basis a card, code or other means of access for use in initiating an Electronic
Fund Transfer from such Consumer’s account if –
(i) such card, code or other means of access is not validated;
(ii) such distribution is accompanied by a complete disclosure, in accordance with
section 29 of the Consumers’ rights and liabilities which will apply if such Card,
code or other means of access is validated;
(iii) such distribution is accompanied by a clear explanation, in accordance with
instructions of the State Bank, that such card, code, or other means of access is
not validated and how the Consumer may dispose of such code, card, or other
means of access if validation is not desired and such Card, code, or other means
of access is validated only in response to a request or application from the
Consumer, upon verification of the Consumer’s identity.
(2) For the purpose of this section, a card, code, or other means of access is validated when
it may be used to initiate an Electronic Fund Transfer.
48. Suspension of Obligation.-If a technical malfunction prevents the effectuation of an Electronic Fund Transfer initiated by a
consumer to another person, and such other person has agreed to accept payment by such
means, the Consumer’s obligation to the other person shall be suspended until the malfunction is
corrected and the Electronic Fund Transfer may be completed, unless such other Person has
subsequently, by written request, demanded paymentby means other than an Electronic Fund
Transfer.
49. Waiver of Rights.-No writing or other agreement between a Consumer and any other Person may contain any
provision which constitutes a waiver of any right conferred or cause of action created by this Act,
and any such writing waiving any right or cause of action shall be void and of no legal effect.
CHAPTER IX
Action Before the Court
50. Damages.-Except as otherwise provided by this section or the provisions of this Act, any person who fails to
comply with any provision of this Act with respect to any other person, except for an error resolved
in accordance with the provisions of this Act, shall, upon an action brought before a court, be
liable to such person for payment of an amount equal to the sum of any actual damage sustained
by that person as a result of such failure.
51. Bonafide Error.-Except as provided by section 50, a person may not be held liable in any action brought under this
chapter for any violation of this Act if the person shows by preponderance of evidence that the
violation was not intentional and resulted froma bonafide error notwithstanding the maintenance
of procedures reasonably adopted to avoid any such error.
52. Actions Taken in Good Faith.-(1) The provisions of section 50 shall not apply to any act done or omitted in good faith, or
purported to be done in conformity with any rule, instruction or interpretation of approval
by an official of the State Bank duly authorized to issue such interpretations or approvals
under such procedure of the State Bank as may be prescribed for.
(2) A Financial Institution or an Authorized Party shall not incur any liability under section 50
on account of any failure to make a disclosure in proper form, if such institution utilized an
appropriate model clause issued by the State Bank, notwithstanding the fact that after
such act, omission, or failure has occurred, such rule, instruction, approval or model
clause under sub-section (1) was amended, rescinded or determined by judicial or other
authority as invalid for any reason.
53. Notification to Consumer Prior to Action.-A person shall not incur any liability for any failure to comply with any requirement under this Act,
if prior to the institution of an action under this Act, such person notifies the consumer concerned
of the failure, complies with the requirements of this Act and makes an appropriate adjustment to
the Consumer’s account and pays actual damages or, where applicable, damages in accordance
with section 39.
54. Action in Bad Faith.-On finding by the court that an unsuccessful action for any alleged failure was brought in bad faith
or for the purposes of harassment, the court may award to the defendant(s) costs of such litigation
and the attorney’s fees found reasonable in relation to the work.
55. Jurisdiction of Courts.-(1) With regard to the amount in controversy, any civil action under this Act may be brought in
any court of competent jurisdiction.
(2) The court exercising jurisdiction shall not adjourn the case for more than ten days at a
time; provided that the aggregate of adjournments granted to the defendant shall not
exceed three.
(3) The court shall announce its judgment within ninety days after notice upon the defendant
in the case was first served.
56. Criminal Liability.-Whoever knowingly and willfully gives false information or inaccurate information or fails to provide
information which he is required to disclose by this Act or any instruction issued thereunder, or
otherwise fails to comply with any provision of this Act shall be punished with imprisonment of
either description which may extend to three years, or with fine which may extend to three million
rupees, or with both.
57. Violations Affecting Electronic Commerce.-Whoever –
(i) knowingly, in a transaction effected by electronic commerce, uses or attempts or
conspires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently
obtained Debit Instrument to obtain money, goods, services or anything else of value
aggregating five thousand rupees or more, or
(ii) knowingly receives, conceals, uses or transports money, goods, services or anything else
of value aggregating five thousand rupees or more obtained by use of any counterfeit,
fictitious, altered, forged, lost, stolen,or fraudulently obtained Debit Instrument, or
(iii) knowingly receives, conceals, uses, sells, or transports one or more tickets for
transportation, and which have been purchased or obtained with one or more counterfeit,
fictitious, altered, forged, lost, stolen or fraudulently obtained Debit Instrument,
shall be punished with imprisonment of either description for a term which may extend to seven
years, or with fine which may extend to one million rupees, or with both.
Explanation.-For the purpose of this section e-commerce means the activity of buying, selling or
contracting for goods, services and making payments using internet or worldwide web through
communication networks including of wireless networks, within or outside Pakistan.
58. Cheating by Use of Electronic Device.-Whosoever cheats by pretending to be some otherperson, or by knowingly substituting one
person for another, or representing that he or any other person is a person other than he or such
other person really is, or by cheating by impersonation, fraudulently or dishonestly uses any credit
or debit card, or code or any other means of access to an Electronic Fund Transfer device, and
thereby causes any wrongful gain to himself orany wrongful loss to any other person, shall be
punished with imprisonment of either description for a term which may extend to seven years, or
with fine which shall not be less than the wrongful loss caused to any person, or with both.
CHAPTER X
Miscellaneous
59. Act to override Law of Insolvency:
(1) Notwithstanding anything to the contrary provided in the law of insolvency, rights and
liabilities of persons arising from transfer orders in this Act shall be governed subject to
the provisions of this section, in case such person is a participant.
(2) No transfer order passed under this Act, any disposition of property in pursuance of such
order, or the default arrangements of a designated system shall be regarded to any extent
as invalid on the ground of inconsistency with the law of insolvency.
(3) No order of the court or any office holder acting under the law of insolvency shall interfere
with settlement of a transfer order passed in accordance with the rules of the designated
system.
(4) A debt or other liability arising out of a transfer order which is the subject of action taken
under default arrangements, may not be proved in a bankruptcy or winding up
proceedings, or may not be taken into account for the purpose of any set-off until the
completion of the action taken under default arrangements.
(5) The Netting arrangement shall be valid and enforceable and an operator or participant of
a designated system shall be required to give effect to such arrangement.
(6) Nothing in this section shall be construed to require the unwinding of any netting or gross
payment done by the operator of a Designated Payment System, whether pursuant to its
default arrangements or otherwise:
Providedthat this section shall not apply in relation to any transfer order which is entered into a
Designated Payment System after the expiry of the day on which a court made an order for
insolvency, judicial management or winding up in respect of the participant, or after a resolution
for voluntary winding up of the participant was passed.
Explanation.- In this section “Default Arrangements” means the arrangements put in place by a
designated system to limit systemic and other kinds of risks which arise in the event of a
participant appearing to be unable, or likely to become unable, to meet its obligations in respect of
a transfer order, including any arrangements for netting.
60. Operator of Designated Payment System Insolvent:
(1) Where the State Bank is satisfied that any operator of a Designated Payment System is
insolvent or likely to become insolvent, or has become or likely to become unable to meet
all or any of his obligations, or has suspended payments or compounded with his
creditors, or where it is in the public interest, State Bank may:
(i) assume control of the whole of the property, business and affairs of the operator
of the Designated Payment System and carry on the whole of his business and
affairs and appoint its own officers, or assume control of such part of its property,
business and affairs and carry on such part of its business and affairs as the
State Bank may determine, and it may further order that the cost and expenses
of the State Bank or the remuneration of any Person so appointed by the State
Bank, may be paid out of the funds and properties of the operator of the
Designated Payment System which shall be regarded as the first charge thereon;
and
(ii) take any action or initiate any proceedings against the operator under the law of
insolvency, whether or not an order has been made under the preceding
sub-section.
(2) No order under this section shall be made unless the operator of a Designated Payment
System or any director or officer of the operator of the Designated Payment System in
respect of which an order is to be made, or who in pursuance of such order is to be
removed from office, has been given a reasonable opportunity of making representation
against the proposed order.
Provided that State Bank may, if an immediate systemic risk is involved, take immediate
action under this section pending the final order.
61. Application of Fine.-A court imposing any fine under this Act may directthat the whole or any part thereof shall be
applied towards compensation to the aggrieved person for any loss caused by the person
committing an offence under this Act.
62. Power to Investigate.-(1) Notwithstanding anything to the contrary provided by any other law for the time being in
force, any information relating to commission of an offence under this Act shall be
recorded in writing by an officer in-charge of a police station, generally empowered in this
behalf under the Code of Criminal Procedure,1898 (Act V of 1898).
(2) Investigation of offences committed under this Act shall be carried out by an
officer-in-charge of the police station empowered under the Code of Criminal Procedure,
1898 (Act V of 1898) to exercise such powers, including power to examine witnesses, to
arrest any person or to seize any document or thing or search any place, and do all other
acts or things necessary for such purpose;
Provided that such officer shall be subject to the same restrictions in respect of any
document or record of a financial or Electronic Money Institution as is provided in respect
of documents in custody of a Bank or a banker in section 94 of the Code of Criminal
Procedure 1898 (Act V of 1898).
63. Trial of Offence.-(1) Notwithstanding anything to the contrary provided by any other law for the time being in
force, offences provided for in Chapter IX of this Act shall be tried by the Court of
Sessions, having territorial jurisdiction in the case, which shall observe the same
procedure as provided for trial of offences bythe Code of Criminal Procedure,1898 (Act V
of 1898).
(2) Cognizance shall be taken by the court upon a report of facts made in writing by a police
officer or upon receiving a complaint of facts which constitute the offence.
(3) In case of a complaint, the court may postpone the issue of process for attendance of the
person complained against and refer the complaint to the officer-in-charge of a police
station for investigation and report.
64. Application to acts done outside Pakistan.-The provisions of this Act shall apply notwithstanding the matters being the subject hereof
occurring outside Pakistan, in so far as they are directly or indirectly connected to, or have an
effect on or bearing in relation to persons, Payment Systems or events within the territorial
jurisdiction of Pakistan.
65. Offences to be non-cognizable etc.-Notwithstanding anything contained in the Code ofCriminal Procedure, 1898 (Act V of 1898), all
offences under this Act are bailable, non-cognizable and compoundable with the permission of the
court.
66. Procedure.-(1) Notwithstanding anything to the contrary provided in this Act or any other law for the time
being in force, no Court or authority or officer shall take cognizance of any offence against
this Act which is alleged to have been committed by any person, party, participant,
Service Provider, operator or Financial Institution or any officer or auditor thereof, who is
authorized, licensed or designated under the Act, except on the complaint in writing of the
State Bank:
Provided that nothing in this sub-section shall apply to a prosecution by a person, party,
participant, Service Provider, operator or Financial Institution or any of its officers or
employees:
Provided further that, where the State Bank is itself empowered to impose a penalty or
fine, it may take cognizance of the offence and start proceedings on the basis of a
memorandum of allegations placed on record by an officer of State Bank.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of
1898), the personal attendance of the complainant before the Court or authority trying the
offence shall not be necessary unless the Court, for reasons to be recorded, requires his
personal attendance at the trial.
67. Overriding Effect.-This Act shall have effect notwithstanding anything to the contrary provided in any other law for
the time being in force or any agreement, contract, memorandum or articles of association.
68. Removal of Difficulties.-If any difficulty arises in giving effect to any provision of this Act, the Federal Government may, in
consultation with the State Bank, make such order as appears to it to be necessary for the
purpose of removing the difficulty.
69. Power to Call For Information.-(1) The State Bank may direct any Financial Institution or Service Provider or any other
Authorized Party to give or furnish to the State Bank, within such time as the State Bank
may specify in this behalf, such information, documents or records in respect of any
business carried on by such institution or Service Provider or other Authorized Party, as
may be within its knowledge or under its possession, custody or control.
(2) If such institution or Service Provider or other Authorized party fails or omits to furnish any
information required by the State Bank under subsection (1) or willfully makes a statement
which is false in any material particular it shall be liable to get its license under section 24
withdrawn by the State Bank and to pay it fine which may extend to one million rupees.
(3) Any party or person aggrieved by an order passed under sub-section (2) may appeal
within fifteen days of such order to the Governor of the State Bank, who shall dispose of
the appeal within sixty days.
70. Secrecy and Privacy.-(1) A Financial Institution or any other Authorized party shall, except as otherwise required by
law, not divulge any information relating to an Electronic Fund Transfer, affairs or account
of its consumer, except in circumstances in which, according to the practice and usage
customary among bankers, it is necessary or appropriate for a Financial Institution to
divulge such information, or the consumer has given consent therefor.
(2) No person other than an officer or agent appointed by the Financial Institution that
maintains the account of a consumer may have access through an Electronic Terminal to
information relating to Electronic Fund Transfer, the affairs, or the account of the
consumer.
(3) The rules governing the operation of individual accounts will be applicable to Electronic
Fund Transfers in relation to disclosure of information to third parties.
71. Complaint Resolution.-(1) A consumer, not satisfied with the outcome of a complaint made to a Financial Institution
in relation to any Electronic Fund Transfer or disclosure made by a Financial Institution to
a third party, without prejudice to any right toseek any other remedy under the law, may
make a complaint to the State Bank.
(2) The State Bank after hearing the parties may pass such order as it deems fit under the
circumstances of the case.
72. Suspension of Operation.-(1) The Federal Government in consultation with the State Bank may by a general order, for
the time being suspend operation of any provision of this Act, and from the date of such
order, such provision shall cease to apply.
(2) When the order made under sub-section (1) is withdrawn by the Federal Government
such suspension shall cease to operate with effect from the date specified by the Federal
Government in this behalf.
73. Immunity of the State Bank and its Employees, etc.-(1) No suit or other legal proceedings shall lie against the State Bank or any officer or
employee thereof or any person acting under its direction:
(i) for any act done in good faith,-(a) in the performance, or intended performance, of any function or duty; or
(b) in the exercise, or intended exercise, of any power, in the capacity of the
State Bank as the designated Bank under this Act; or
(ii) for any neglect or default in the performance or exercise in good faith of such
function, duty or power.
74. Penalties.-(1) Any financial Institution or Service Provider, who willfully fails to comply with any provision
of this Act or rules, circulars, directions, orders or bye-laws issued under this Act or any
provision thereof, shall be liable to pay fine to the State Bank which may extend to one
million rupees.
(2) In case of failure to pay the fine, State Bank may suspend or revoke the license of the
Service Provider or Financial Institution concerned, as the case may be.
(3) If any amount of fine under sub-section (1) remains unpaid, it may be recovered as
arrears of land revenue.”