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BANK OF PUNJAB ACT, 1989          

SECTIONS

CONTENTS

1.

Short title, extent and commencement.

1-A.

Act to override other laws.

2.

Definitions.

3.

Establishment and incorporation of the Bank.

4.

Share capital.

5.

Register of Shareholders.

6.

Qualifications of shareholder.

7

Government to be shareholder.

8

Head Office of the Bank.

9

Board.

10

Constitution of the Board.

11

Managing Director.

12

Qualifications and disqualifications of Directors.

13

Removal of Directors.

14

Terms of office of Directors.

15

Vacancies.

16

General and Special Meetings.

17

Votes of shareholders.

18

Business which the Bank is authorised to transact.

19

Business which the Bank is not authorised to transact.

20

Exceptions.

21

Auditors.

22

Government Auditors.

23

Rights and Duties of Auditors.

24

Liquidation of the Bank.

25

Power of the Board to make bye-laws.

26

Immunity.

 

 

BANK OF PUNJAB ACT, 1989

(Pb. Act XII of 1989)

[30 July 1989]

 

An Act to constitute the Bank of Punjab

Preamble : —

Whereas it is expedient to provide for the establishment of a Bank of providing banking facilities in the Punjab;

            It is hereby enacted as follows:-

 

1.         Short title, extent and commencement : —

    (1)        This Act may be called the Bank of Punjab Act, 1989.

            (2)        It extends to the whole of the Punjab.

            (3)        It shall come into force at once.

 

1-A.     Act to override other laws : — This Act shall have effect notwithstanding anything contained in any other law for the time being in force.

 

2.         Definitions : — In this Act, unless there is anything repugnant in the subject or context, : —

        (a)  “the Bank” means the Bank of Punjab constituted by the Act;

        (b)  “the Board” means the Board of Directors of the Bank;

        (c)  “Director” means a Director for the time being of the Board;

        (d)  “dividend” includes bonus;

        (e)  “goods” includes bullion, wares and merchandise;

        (f)  “general meeting” means the annual meeting of the shareholders of the Bank;

        (g)  “Government” means Government of the Punjab;

        (h)  “meeting” includes an adjourned holding of the meeting;

        (i)  “prescribed” means prescribed by bye-laws made under this Act;

        (j)  “Managing Director” means the Managing Director of the Bank;

        (k)  “special meeting” means a meeting of the shareholders of the Bank convened for transacting some particular business specified in the notice convening the meeting;

         (l)  “special resolution” means a resolution passed at a special meeting;

           

3.         Establishment and incorporation of the Bank : —

    (1)       As soon as may be after the commencement of this Act, there shall be constituted in accordance with the provisions of this Act a bank to be called the Bank of Punjab to carry on the business of banking.

            (2)        The Bank shall be a body corporate having perpetual succession and a common seal and shall by the said name sue and be sued.

 

4.         Share capital : —

    (1) Subject to the provisions of this Act the authorised Capital of the Bank shall be [two thousand million rupees divided into two hundred million ordinary shares] of ten rupees each.

            (2)        Out of the said capital there shall, from time to time, be issued such number of shares and on such terms, if any, including the terms of the brokerage and underwriting, as the Board may decide.

            (3)        The liability of the shareholders of the Bank shall be limited to the amount not fully paid up on their shares.

            (4)        The shareholders of the Bank may, subject to the sanction of the Government, by special resolution, increase or reduce the capital of the Bank.

            (5)        The shares of the Bank shall be movable property and each share shall be distinguished by its appropriate number.

 

5.         Register of Shareholders : — The Bank shall maintain at its Head Office established under section 8 a register, to be called the Register of the Shareholders of the Bank, and shall enter therein such particulars as may be prescribed.

 

6.         Qualifications of shareholder : —

    (1)      No person shall be qualified to be registered as shareholder who by reason of anything contained in any law for the time being in force is not competent to enter into any contract.

            (2)        A person who subsequent to his registration, is discovered to have been not qualified as aforesaid at the time of registration shall not be entitled to exercise any of the rights of a shareholder otherwise than for the purpose of the sale of his shares under the orders of a competent Court.

 

7.         Government to be shareholder : — Notwithstanding anything contained in section 6, the Government shall be a shareholder of the Bank and shall held at all times not less than fifty-one percent of the shares issued by the Bank.

 

8.         Head Office of the Bank : — The Head Office of the Bank shall be at Lahore.

 

9.         Board : — The general superintendence and direction of the affairs and business of the Bank shall be entrusted to a Board which may exercise all powers and do all such acts and things as may be exercised or done by the Bank and are not by this Act expressly directed or required to be done by the Bank in general meeting.

 

        10.        Constitution of the Board : —

(1)       The Board shall consist of the following Directors, namely : —

         (a)   the Managing Director appointed by the Government under section 11;

         (b)  four Directors elected in special meeting by the shareholders for a term of three years; and

         (c)   six Directors appointed by the Government:

            Provided that a Director under clause (b), shall not be eligible to seek election after a second consecutive term without a break of one term.

       (2)     The Chairman of the Board shall be nominated by Government from amongst official directors.

(3)       The Chairman shall preside over the meetings of the Board and shall have a casting vote, but he shall not exercise any executive authority or powers.

 

        11.        Managing Director : —

(1) The Managing Director shall be appointed by the Government for a period of five years and on such salary and terms and conditions of service as the Government may determine:

            Provided that neither the salary nor the terms and conditions of service shall be varied to his disadvantage during his tenure of office:

            Provided further that the appointment may be terminated in the manner prescribed on the ground of physical or mental incapacity or gross misconduct.

        (2)        The Managing Director shall on the expiry of his term of office be eligible for re-appointment.

        (3)        The Managing Director shall be the chief executive officer of the Bank and shall, subject to any bye-laws made in this behalf, direct and control, on behalf of the Board, the affairs of the Bank.

 

        12.        Qualifications and disqualifications of Directors : —

(1)No person not appointed by the Government to serve as a Director shall be qualified to serve as Director unless he is a holder in his own right of unencumbered shares of the Bank to the nominal amount of twenty-five thousand rupees at the least.

        (2)        No person shall be qualified to serve as a Director : —

             (a)  if he is a salaried officer of any Government whether within or without Pakistan and is not authorised by the Government to serve as a Director;

         (b)        if he has been convicted of an offence involving moral turpitude;

         (c)        if he was at any time in the service of the Bank and was dismissed or his services had been terminated by the Bank;

              (d)  if he is a Director of any commercial bank other than a bank sponsored or established by or under the authority of the Government or the State Bank of Pakistan for the development of industry or agriculture in the country, or a bank which is a society registered under the Co-operative Societies Act, 1925 or any other law for the time being in force in Pakistan relating to co-operative societies;

             (e)  if he is in the employment of any banking company, whether on salary or on commission, and is engaged in the performance of any continuous service for remuneration for any such company;

             (f)  if he is for the time being disqualified for membership of any body established by or under any law for the time being in force of which the constituent members are wholly or partly chosen by means of election ;or

             (g)  if he has been found by a competent court under any law to have acted against the interest of a person with whom he had fiduciary relationship.

            (3)        The office of a Director shall be vacated : —

             (a)  if the person holding it resigns his office or dies;

         (b)  if he accepts or holds any other office of profit under the Bank;

             (c)  if he is, or at any time has been, adjudicated an insolvent, or compounds with his creditors or suspends payment;

             (d)  if he is declared to be a lunatic or of unsound mind by a competent court;

              (e)  if he has absented himself from three consecutive meetings of the Board or from all such meetings for a continuous period of six months, whichever is longer, without leave of absence from the Board;

              (f)  if he ceases to hold in his own right the amount of shares required to qualify him for the office;

              (g)  if he incurs any of the disqualifications mentioned in sub-section (2);

              (h)  if, in relation of the Bank, he has failed to pay any advance, loan or credit limit or any installment thereof or interest thereon, or any amount due on any guarantee or to do or perform any act agreed or undertaken in writing to be done or performed by him, and such failure continues for a period of one month after notice in writing has been served on him by the Bank calling upon him to make the payment or to do or perform the act; or

(i)   if he has been a Director for a continuous period of six years from the date when he was first elected as such Director or, as the case may be, was appointed by name and otherwise than by designation of office, as such Director.

        (4)        No two persons who are partners of the same mercantile firm, or who are Directors of the same private company, or one of whom is the general agent of, or holds a power of procuration from the other or from a mercantile firm of which the other is a partner, shall be eligible or qualified to serve as Directors of the Board.

 

         13.        Removal of Directors : —

(1)     The shareholders may, by a special resolution passed by the votes of shareholders holding in the aggregate more than one half of the paid-up capital for the time being remove any Director, other than a Director appointed by the Government, before the expiration of his period of office and appoint in his stead a qualified person who shall hold office subject to sub-section (2) of section 15.

        (2)        Directors appointed by the Government may be removed and replaced by other Directors at the discretion of the Government.

 

         14.    Terms of office of Directors : — A Director appointed by the Government other than the Managing Director, shall hold office during the pleasure of the Government.

 

         15.        Vacancies : —

(1)       Any vacancy occurring on the Board by the death, resignation, removal or disqualification of any Director shall be filled by the remaining Directors, who shall co-opt a duly qualified person to fill the vacancy:

            Provided that where a vacancy occurs in the office of a Director appointed by the Government, the vacancy shall be filled only by appointment by the Government.

        (2)        Any Director so appointed shall be deemed to have held office from the date on which the Director in whose place he is appointed was appointed, or, when such Director was co-opted or appointed under sub-section (1), from the date on which his immediate predecessor was appointed, as the case may be.

        (3)        Any Director co-opted under sub-section (1) shall retire at the next general meeting, as the case may be, and the vacancy so occurring on the Board shall be filled by election as provided under this Act.

 

        16.        General and Special Meetings : —

(1)     In the first week of March in every year, or as soon thereafter as is convenient, a general meeting shall be held annually at the head office at Lahore, at such time as may be determined by the Board and at the meeting the shareholders present shall be entitled to discuss the annual account, the report of the Board on the working of the Bank throughout the year, and the auditors’ report on the annual balance sheet and accounts, made up to the preceding thirty-first day of December.

        (2)        Special meetings shall be convened and held in such manner and at such time and place as may be prescribed.

 

        17.        Votes of shareholders : —

(1)     Every shareholder shall be entitled to attend any meeting and each shareholder who has been registered as such for a period of not less than three months prior to the date of such meeting shall when present in person and on a show of hands, have one vote and on a poll each shareholder so registered, shall have one vote for each share held by such shareholder:

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