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BANKING COMPANIES (AMENDMENT) ORDINANCE, 2000

An Ordinance further to amend the Banking Companies Ordinance, 1962

 

Gazette of Pakistan, Extraordinary,

12th September, 2000

No.F.2(l)/2000-Pub., dated 12-9-2000.-The following Ordinance made by the President is hereby published for general information:—

Whereas it is expedient further to amend the Banking Companies Ordinance, 1962 (L VII of 1962), for the purposes hereinafter appearing;

And whereas the National Assembly and the Senate stand suspended in pursuance of the Proclamation of emergency of the fourteenth day of October, 1999, and provisional constitution Order NO. 1 of 1999.

And whereas the President is satisfied that circumstances exist which render it necessary to take immediate action.

Now, there fore, in pursuance of the proclamation of emergency of the fourteenth day of October, 1999, and the provisional constitution order No. 1 of 1999, as well as order No. 9 of 1999, and in exercise of all powers enabling him in that behalf, the president of the Islamic Republic of Pakistan is pleased to make and promulgate the following Ordinance : —

1.       Short Title and commencement. —

    (i).  This ordinance may be called the Banking Companies (Amendment) Ordinance, 2000.

              (ii)  It snail come into force.

 

2.       Amendment of section 3A, Ordinance LVII of 1962,- In the Banking Companies Ordinance, 1962 (LVII of 1962), hereinafter referred to as the said Ordinance, in section 3A, in subsection (1), after the figure and comma "6," the figure and comma "13," shall be inserted.

 

3.       Amendment of section 5, Ordinance LVII of 1962. – In the said Ordinance, in section 5, in clause (a), in sub-clause (i), for the brackets and figure "(3)" the brackets and figure "(2) shall be substituted.

 

4.       Substitution of section 13, Ordinance, LVII of 1962.- In the said Ordinance, for section 13, the following shall be substituted, namely:–

13.     Requirement as to minimum paid-up capital and reserves. "(I) Subject to subsection (2) no banking company shall—

(a)      Commence business unless it has a minimum paid-up capital as may be determined by the State Bank; or

(b)      Carry on business unless 'the aggregate of its capital and unencumbered general reserves of such minimum value within such period as may be determined and notified by the State Bank from time to time for banking companies in general or for a banking company in particular.

(2)      No banking company incorporated outside Pakistan shall be deemed to have complied with the provisions of subsection (1) unless it deposits, and keeps deposits, with the State Bank an amount by transfer of funds from outside Pakistan or in the form of assets acquired out of remittable profits made by it from deposits in Pakistan which is not less that what is required to be maintained under subsection (1), in any one or more of the following forms, namely:-

(i)       Interest-free deposit in cash in Pakistan rupees;

(ii)      Interest free deposit in a freely convertible approved foreign exchange within the meaning of the State Bank of Pakistan Act, 1956 (XXXIII of 1956), specified by the State Bank in respect of such banking company; and

(iii)     Deposit of unencumbered approved securities.

(3)      Without prejudice to the provisions of section 83, the State Bank may, by order in writing, require any banking company which has failed to comply with the provisions of clause (b) of subsection (1) within the period determined and notified under that clause to deposit with the State Bank suet amount not exceeding the amount by which the aggregate value of the capital and unencumbered general reserves of such banking company falls short of the minimum amount of the aggregate of the capital and unencumbered general reserves required to be maintained by such banking company pursuant to clause (b) of subsection (1) on such terms and conditions as At State Bank may determine and every banking company which is so required shall be bound to comply with the order.

(4)      Any amount deposited and kept deposited with the State Bank under subsection (2) by any banking company incorporated outside Pakistan shall, in the event of the banking company ceasing for any reason to carry on banking business in Pakistan, be an asset of the banking company on which the claims of all the creditors of the banking company in Pakistan shall be the first charge.

(5)      If any dispute arises in computing the aggregate value of the capital and unencumbered general reserves of any banking company, a determination thereof by the State Bank shall be final.         .

Explanation.- For the purposes of this section,

(a) the expression "value" means the real or exchangeable value or, if the real or exchangeable value exceeds the normal value, the nominal value; and

(b) the expression "capital and unencumbered general reserves" means paid-up capital and such other items as may be notified in this regard by the State Bank from time to time.

 

5.       Amendment of section 27, Ordinance LVII of 1962.— In the said Ordinance, in section 27, in subsection (2), in the second proviso, the words, brackets and figures "referred to in subsection (1) of section 13 or of such further period as the State Bank may under the proviso to that subsection thinks tit to allow" shall be omitted.

 

6.       Amendment of section 29, Ordinance LVII of 1962.- In the said Ordinance, in section 29, in subsection (2), for the words, brackets and figure "the proviso to subsection (3)" the words, brackets and figure "subsection (2)" shall be substituted.

 

7.       Amendment of section 83, Ordinance LVII of 1962,- In the said ;e, in section 83, in subsection (7), the words, brackets and figure ,on (2) of" shall be omitted,