Welcome to the Session on The Bank Companies Act, 1991

CONTENTS
PART-I PART-II PART-III PART-IV Preliminary (Sec 1-6) Business of Banking Companies (Sec 7-50) Illegal Banking Transactions by Companies, Etc. (Sec 51-56) Prohibition of Certain Activities in relation to Banking Companies (Sec 57) Acquisition of the Undertaking of Banking Companies (Sec

PART-V 58-63) PART-VI

Suspension of Business and Winding up of Banking Companies (Sec 64-77) Speedy Disposal of Winding up Proceedings (Sec 78-108)

PART-VII

PART-VIII Miscellaneous (Sec 109-123)

THE BANK COMPANIES ACT, 1991

1. Short Title: The Bank Companies Act, 1991

2.
3.

Application of other Laws not Barred

Limited Application of the Act to Co-Operative Banks

5.

Definition: Financial Institutions/ /Company/Scheduled Bank/ New Bank/ Specialized Bank/ Banking Company/Banking Business of Banking Companies

7.

10.

Disposal of non-banking assets

No banking company shall hold any immovable property for any period exceeding 7 years BB may extend the aforesaid 5 years

12.

Restriction on removal of records and documents 13. Requirement as to minimum paid- up capital and reserve Taka four hundred crore or10% of RWA whichever is higher BB may alter the conditions in consultation with the government

14.

Regulation of paid-up capital, subscribed capital and authorized capital and voting rights of share holders. A. Restriction on buying shares of banks, Etc. Not more than 10% share of a bank to be centralized Submission of oath or declaration
Election of new directors BB may require any banking company( other

14

15. than

new or specialized) to call a general meeting of the share-holders The election shall not be called in question in any court Role of BB in the appointment of Adviser, CEO

15 A. Filling of the post of chief executive officer

The post of CEO shall not be kept vacant for a consecutive period of more than 3 months BB may appoint an Administrator and the company shall bear the expenses

15AA. Restrictions regarding tenure of office of director

Not more than six years consecutively in two terms( Except CEO) In special case a director can hold the office for three consecutive terms

17. Vacation of office of Director Failing to repay any advance or loan Failing to repay any amount due or any guarantee given by him Failing to perform any act agreed to or undertaken in writing to be done by him 18. Certain privileges of directors Directors will not receive any financial benefit other than fees for attending meetings of the board of directors

 Where any director of a banking company execute any business transaction other than banking business with any business establishment where he is associated or he has at least 10 percent share, the banking company shall submit a report on that in its general meeting 22. Restriction as to payment of dividend
Without writing of all capitalized expenses Shortfall in required paid-up capital and reserve Some exceptions

23. Prohibition of common Directors A Director of any other banking company or financial institution not engaged in banking business An external auditor, legal adviser or otherwise engaged in any responsibility of profit of the banking company A director of companies having voting rights in excess of 20 % of the banking company 24. Reserve fund Transfer of at least 20 % profit to the reserve fund Reporting to the BB for appropriation within 21 days BB may extend the period 27. Restrictions on loans and advances Loans or advances against the security of its own share

 Grant unsecured loans to any of its Directors/ family members Any firm in which the banking company or any of the persons referred to earlier has got interest in the company
27AA. List of defaulted borrower Sending list of defaulted borrowers to the BB BB shall send the list to all banking companies No banking company shall provide any credit facility to any defaulted borrower The lending banking company shall file suit against the defaulted borrower according to law in force

29. Power of BB to control advances by banking companies

BB may determine the lending policy to be followed by the Banking companies BB may give directions to banking companies in the following matters: Credit ceilings to be maintained The minimum ratio of small loans to the total advances The purpose of loan The rate of interest to be charged on advances

31. Licensing of Banking Companies

32. Restrictions on opening of new and transfer of existing place of business

33. Maintenance of liquid assets

34. Assets in Bangladesh

35. 38. 39. Unclaimed Deposits and Valuable articles Accounts and Balance Sheet Audit

B/S and P/L account shall be audited by a person duly qualified under the Bangladesh Chartered Accounting Order, 1973

The duties and liabilities in line with the Companies Act. In addition to that Accuracy of Profit/ Loss Following general accounting procedure Adequacy of provision

39 B. Auditors to be declared disqualified

44. Inspection by the Bangladesh Bank 45. Power of BB to give directions 46. Power of BB to remove directors from office 57. Punishment for certain activities in relation to banking companies

THANK YOU ALL