IHC told: ‘Khushhali Microfinance Bank’s employees also entitled to EOBI benefits’

Business Recorder reported that the Islamabad High Court was told staff of Khushhali Microfinance Bank also qualify for safeguards and benefits under the Employees' Old-Age Benefits Institution (EOBI) scheme. A single-judge bench led by Justice Arbab Tahir is hearing a petition from the bank that asks for its staff to be removed from EOBI coverage and related old-age benefit rules.

A 2019 EOBI demand notice sought approximately Rs1 billion in unpaid old-age contributions for the bank's workforce. The bank challenged the demand in the Islamabad High Court, citing Section 47(e) of the EOBI Act, 1976, which excludes bank and banking company employees from its scope, and argued the notices were issued without jurisdiction. Enforcement of those notices has stayed on hold for approximately seven years.

EOBI's counsel, Barrister Umer Ijaz Gilani, argued that microfinance bank employees are not excluded, because the 1976 Act leaves 'bank' and 'banking company' undefined and they must be read as they were understood when it was passed. Advocate Asim Imdad, representing the bank, countered that the bank already provides generous benefits to its staff and that later amendments treat microfinance banks as akin to banks. After preliminary arguments from both sides, the bench asked counsel to argue further and adjourned the case until 15th October.