​Final Examination

Course Code​:​ ​LL.B.3331

Course Title: Banking & Securities Exchange Law

Submitted To -
Mr. Niaz Mahmud

Noor-E-Rasheed

Lecturer

LLB (Hon’s) Program,

Department of Law, NUB

​ Submitted By –
​Najmul Hasan
Id ​: ​07170203149

​Department of Law

​ ​Spring -2020
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Question No - 1
(a)
T​his provision is given under the ​Section 7 ​of
the ​Banking Companies Act,1991 -

Now I will describe the allowable activities

carried out by a bank under the ​Bank
Companies Act,1991.

Section-7( Business of Bank Companies ) :

● A banking company may engage in all or
any of the following forms of business,
namely -

1)​ the borrowing, raising or taking up of

money.

2)​ the lending or advancing of money either

upon or without security.
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3)​ the drawing, making, accepting,
discounting, buying, selling, collecting and
dealing in bills of exchange, hoondees,
promissory notes, coupons, drafts,bills of
lading, railway receipts, warrants, debentures,
certificates, participation term certificates,
term finance certificates, musharika
certificates, modareka certificates, such other
instruments as may be approved by the
Bangladesh Bank, and such other instruments
and securities whether transferable or
negotiable or not.

4) ​the granting and issuing of letters of credit,

traveller's checks, and circular notes.

5)​ the buying, selling and dealing in gold and

silver coins and coins of other metals.

6)​ the buying and selling of foreign exchange

including foreign bank notes.
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7)​ the receiving of all kinds of bonds or other
valuables on deposit or for safe custody or
otherwise.

8)​ providing vaults for the safety of the

deposits.

9)​ the collecting and transmitting of money

against securities.

10)​ acting as agents for the Government, local

authorities or any other person.

11) ​the carrying on of agency business of any

description including the clearing and
forwarding of goods and acting as a law agent
on behalf of customers, but excluding the
business of a managing agent or treasurer of
a company.

12) ​contracting for public and private loans

and negotiating and issuing the same.
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13)​ the effecting, insuring and underwriting of
shares, stocks, debentures, debenture stock
of any company, corporation or association
and the lending of money for the purpose of
any such issue.

14)​ the carrying on and transacting of every

kind of guarantee and indemnity business;

15)​ bringing into possession any property

which may satisfy or partly satisfy any of the
claims of the banking company and the
managing and borrowing of such property.

16) ​undertaking the administration of movable

and immovable property as executor, trustee
or otherwise.

17)​ the acquisition, construction, maintenance

and alteration of any building or works
necessary or convenient for the purpose of
the banking company.
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18) ​selling, improving, managing, exchanging,
leasing, mortgaging or otherwise
transferring or turning into account or
otherwise disposing of all or any part of the
property or rights of the banking company.

19) ​acquiring and undertaking the whole or

any part of the business of any person or
company, when such business is of a nature
enumerated or described in this subsection.

20)​ to grant and issue of letter of credit,

traveler's cheques, credit cards and circular
notes.

(b)
B​angladesh Bank is the term often used to
describe the authority responsible for
policies that affect a country's supply of
money and credit. It has become a symbol
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of a country's sovereignty in the arena of
money and finance.

P​ower and functions of Bangladesh Bank

under the ​Bangladesh Bank Order,1972
and the Bank Companies Act,1991 -

Under the​ ​Bangladesh Bank Order,1972-

Section -7A:​ ​The main functions of the
Bank shall be-
(a) to formulate and implement monetary
policy.
(b) to formulate and implement intervention
policies in the foreign exchange market.

(c) to give advice to the Government on the

interaction of monetary policy with fiscal and
exchange rate policy, on the impact of
various policy measures on the economy
and to propose legislative measures it
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considers necessary or appropriate to attain
its objectives and perform its functions.
(d) to hold and manage the official foreign
reserves of Bangladesh.

(e) to promote, regulate and ensure a

secure and efficient payment system,
including the issue of bank notes.

(f) to regulate and supervise banking

companies and financial institutions.

Under the Bank Companies Act,1991 -

Section -25:​ Cash Reserve Fund:
● It is mandatory for all banking companies
to maintain certain percentage of cash
reserve with Bangladesh Bank. The
percentage of cash reserve changes from
time to time through Bangladesh
Bank’s notification.
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Section –27AA:​ List of Defaulting

Borrowers:
● The Banking companies are allowed to
send the list of defaulting borrowers to the
Bangladesh Bank from time to time.

Section -31:​ License of Banking

Companies:
● No banking company shall carry out
banking business in Bangladesh without
obtaining a license from Bangladesh
Bank.

Section -32:​ Opening a branch in a new

place of business:
● No banking company shall open a new
branch in a new place or change the
location of an existing branch without
obtaining prior
permission of Bangladesh Bank.

Section -37:​ ​Power to publish information:

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● The Bangladesh Bank has the power to
publish information of banking companies
regarding overdue loans & advances of
banking companies.

Section -38:​ ​Accounts and balance sheet:

● At the end of each year, every banking
company shall prepare a balance sheet
and profit and loss account as on the last
working day of the year.

Section -39:​ ​Audit:

● The balance sheet and profit and loss
account prepared in accordance with
Section 38 shall be audited by a
Chartered Accountants Firm with a special
report to the Bangladesh Bank highlighting
the status of the financial parameters.

Section -40:​ ​Report submission:

● The accounts and balance sheet along
withthe Auditor’s Report, duly approved by
the Board of Directors, shall be published
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in the Daily Newspaper, and three copies
thereofshall be sent to Bangladesh Bank
by three months at the close of the period
to which they relate.

Section -46:​ ​Power of Bangladesh Bank to

remove Directors:
● In order to protect the interest of
thedepositors of the Banking Companies,
the Bangladesh Bank is empowered to
remove the Chairman or Director or CEO of
the concerned banking companies recording
the reasons of removal.

Section -49​ ​: ​further powers and functions

of the Bangladesh Bank.-
The Bangladesh Bank may ​-

a) caution or prohibit banking companies

generally or any banking company in
particular against entering into any
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particular transaction or class of
transactions.

b) require banking companies generally or

any banking company in particular to
refrain from taking such action as it may
specify in relation to any matter relating to
the business of ​uch banking company or
companies, or to take such action in relation
thereto as the Bangladesh Bank thinks fit.

c)​ on a request from the banking companies

concerned and subject to the provisions of
section 76 assist as intermediary or
otherwise, in proposals for the
amalgamation of such banking companie.

(Assalamu Alaikum)