Welcome to the Session

On
The Bank Companies Act, 1991
 CONTENTS
PART-I Preliminary (Sec 1-6)

PART-II Business of Banking Companies (Sec 7-50)

PART-III Illegal Banking Transactions by Companies, Etc. (Sec 51-56)

PART-IV Prohibition of Certain Activities in relation to Banking

Companies (Sec 57)

PART-V Acquisition of the Undertaking of Banking Companies (Sec 58-63)

PART-VI Suspension of Business and Winding up of Banking Companies

(Sec 64-77)

PART-VII Speedy Disposal of Winding up Proceedings (Sec 78-108)

PART-VIII Miscellaneous (Sec 109-123)

THE BANK COMPANIES ACT, 1991

1. Short Title: The Bank Companies Act,

1991

2. Application of other Laws not Barred

3. Limited Application of the Act to

Co-Operative Banks

7. Business of Banking Companies

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 one hundred crore or the
amount of risk based assets
•        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.

14 A. Restriction on buying shares of banks, Etc.

•   Not more than 10% share of a bank to be centralized
•   Submission of oath or declaration

15.    Election of new directors

•   BB may require any banking company( other 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
•   Appointment of directors from the depositors
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
7. 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

•        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
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. Unclaimed Deposits and Valuable

articles

38. Accounts and Balance Sheet

39. 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 procedur
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