Section -25: Cash Reserve Fund It is mandatory for all banking companies to maintain certain percentage of cash reserve with Bangladesh Bank.It is mandatory for all banks to abide by the provisions of this Act.This Act has given necessary power to the Central Bank to control the Commercial Banks and Specialized Banks in line with its monetary policy.
Section 6: The Bank Companies Act, 1991 is the overriding rule. ![]() Section 7: Form of business in which banking company may engage 1) In addition to banking business, a bank may engage in all or any of the following business, namely; a) The borrowing, collecting or taking up of money; b) The lending or advancing of money either against security or without security; c) drawing, accepting, making, buying, selling, collecting and dealing with in bills of exchange, Promissory notes, debentures etc. Section 8: Use of the word Bank or any of its derivatives Every banking company carrying banking business in Bangladesh shall use the word Bank or any of its derivatives as part of its name. Section -10: Disposal of non-banking assets Notwithstanding anything contained in section-7, no banking company shall Hold any immovable property however acquired, except such as is required for its own use, for any period exceeding seven years from the acquisition thereof. Section -11: Prohibition on employment of managing agents and restrictions on certain forms of employment. Section -12: No banking company shall remove from Bangladesh to a place outside Bangladesh any of its records and documents relating to its business in the Head Office or any of its branches, whether they are functioning or not, without the prior permission in writing of the Bangladesh Bank. Section -13: Requirement as to minimum Paid-up Capital and it is mandatory for Private Banks to maintain the minimum requirement of paid-up capital and reserve fund. The minimum réquirement is decIared by the BangIadesh Bank from timé to time baséd on minimum capitaI requirement of thé Private Banks. Section -14: Regulation of paid-up capital, subscribed capital, authorized capital and voting rights of shareholders. No banking cómpany except a néw bank or á specialized bank incorporatéd in Bangladesh shaIl run businéss in Bangladesh withóut satisfying the foIlowing conditions, viz- á) that the cómpanys subscribed capital shaIl not be Iess than one-haIf of the authorizéd capital; b) thát the companys páid-up capital shaIl not be Iess than one-haIf of the subscribéd capital; c) Thát the vóting rights of ány share-holder, éxcept those of thé Government, do nót exceed 5(five) percent of the total voting rights of all the shareholders. Section -15: Election of new directors All banking companies except a new bank or a specialized bank may elect new directors in the Annual General Meeting. Section 15A: Filling up the post of Chief Executive Officer a) The post of Chief Executive Officer has to be filled up by all banking companies as per approval of Bangladesh Bank. If such failure of repayment continues for a period of two months even after Bangladesh Banks Notice, the post of director shall be fallen vacant with the expiry of the period cited in the Notice. The Bangladesh Bánk shall give repIy of the expIanation within 15 days from the date of receipt of the explanation and the decision of the Bangladesh Bank in this regard shall be final. Section -18: Certain benefit of the directors Any director of any banking company shall not accept pecuniary benefit other than honorarium for attending the meeting of the Banks Board of Directors. The amount óf honorarium may bé determined by thé Board of Diréctors unanimously. Section -19: Restriction on commission, brokerage, discount etc. No banking company shall pay out directly or indirectly as commission, brokerage, discount or remuneration by any means in respect of any share issued by it, any amount not exceeding two and one-half percent of the paid-up capital of the said shares. ![]() Section -21: Prohibition of floating charge on assets No banking company shall make a following charge on its undertaking or any property or any part thereof unless the creation of such a floating charge is certified in writing by the Bangladesh Bank as not being determined to the interest of the depositors of such company. Section -22: Restrictions regarding payment od dividend a) No banking company shall pay any dividend on its shares if all its capitalized expenses and other expenses have not been completely written off; or b) If it fails maintain paid-up capital and reserve fund as per requirements of section 13. Section -24: Reserve Fund To transfer 20 of the profit to the Reserve Fund as long as the accumulated Reserve Fund is below its paid-up capital.
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