Banking Companies (Amendment) Ordinance, 2001
30th August, 2001
An Ordinance further to amend the Banking Companies Ordinance, 1962
F No. 2(1)/2001‑Pub.‑The following Ordinance promulgated by the President is hereby published for general information :
WHEREAS it is expedient further to amend the Banking Companies Ordinance, 1962 (LV11 of 1962), for the purposes hereinafter appearing;
AND WHEREAS the President is satisfied that circumstances exist which render it necessary to take immediate action;
NOW, THEREFORE, in pursuance of the Proclamation of Emergency of the fourteenth day of October, 1999, and the Provisional Constitution Order No. l of 1999, road with the Provisional Constitution (Amendment) 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:
- Short title and commencement. –
(1) This Ordinance may be called the Banking Companies (Amendment) Ordinance, 2001.
(2) It shall come into force at once.
- 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 sub‑section (1), after the figure and comma “42,” the figures and commas “47, 48,” shall be inserted.
- Substitution of sub‑section (16) of section 47, Ordinance LVII of 1962. In the said Ordinance, in section 47, for sub‑section (16) the following shall be substituted, namely:
“(16) In this section, “banking institution” means any banking company and includes the National Bank of Pakistan and any other financial institution covered under section 3A.”.
- Amendment of section 48, Ordinance LVI1 of 1962.‑ In the said Ordinance, in section 48, after sub‑section (6), the following new sub‑ section shall be added, namely:
“(7) In this section, “banking company” means any banking company and includes the National Bank of Pakistan and any other financial institution covered under section 3A. “.
- Substitution of section 54, Ordinance LVII of 1962.‑ In the said Ordinance, for section 54 the following shall be substituted, namely:
“54. Preliminary report by the official liquidator.‑ Notwithstanding anything to the contrary contained in section 329 of the Companies Ordinance, 1984 (XLVII of 1984), where a winding up order has been made in respect of a banking. company, the official liquidator shall submit a preliminary report to the High Court within ninety days from the date of the winding up order or where the winding up order has been made before the 1st day of August, 2001, within ninety days therefrom, giving the information required by section 329 ibid so far as it is ,available to the official liquidator and also stating the amount of assets of the banking company in cash which are in his custody or under his control on the date of the report and the amount of its assets which are likely to be collected in cash before the expiry of that period of ninety days. in order that such assets may be applied speedily towards making priority payments under section 58 and in the discharge, as far as possible, of the liabilities and obligation.; of the banking company in accordance with the provisions of section 58, and the official liquidator shall make for the purposes aforesaid every endeavour to collect in cash as much of the assets of the banking company as practicable:
Provided that the High Court may, if it deems lit in any particular case, extend the period of ninety days, referred to in this section, for a further period of sixty days „.
- Substitution of section S8, Ordinance LVII of 1962.‑ In the said Ordinance, for section 58 the following shall be substituted, namely:
“58. Priority payments to depositors.‑
(1) In every proceeding for winding up of a banking company where a winding up order has been made, within ninety day,.‑, from the date, of the winding up order or where the winding up order has been made before the 1st day of August, 2001. within ninety days therefrom, the payments referred to in sub‑section (2) shall be made by the official liquidator or adequate provision for such payments shall be made by him.
(2) Subject to sub‑section (3), there shall be paid within the period of ninety days as specified in sub‑section (1), in the first place, to every depositor of a banking company a sum of one hundred thousand rupees or the balance at his credit whichever is less.
(3) The total amount paid under sub‑section (2) shall not exceed a sum of one hundred thousand rupees ‑
(i) where a depositor is maintaining more than one account with a banking‑company; and
(ii) in the case of joint account holders of an account.
(4) Where within the period of ninety days as specified in sub‑section (1), full payments cannot be made of the amounts required to be paid under sub‑section (2) with the assets in cash, the official liquidator shall pay within that period to every depositor on a pro rata basis so much of the amount due to ‘every depositor as the official liquidator is able to pay with those assets, and shall pay the rest of that amount to every depositor as and when sufficient assets are collected by the official liquidator in cash.
(5) After payments have been made first to depositors in accordance with the foregoing provisions, the remaining assets of a banking company available for payment shall be utilised according to the following order of priority, namely:
(a) Firstly, for payment of balance due to depositors in accordance with a scheme to be prepared by the State Bank;
(b) After payments have been made to depositors in accordance with clause (a), secondly, for payment on a pro rata basis to every claimant entitled to preferential payment under section 405 of the Companies Ordinance. 1984 (XLVII of 1984); and
(c) After payments have been made in full in accordance with clause. (a) and (b), thirdly, for payment on a pro rata basis of the debts of the general creditors.
(6) For the purposes of this section, banking companies, financial institutions specified in sub‑section (1) of section 3A, leasing companies and modaraba companies shall be treated as general creditors and not. depositors.
(7) Subject to sub‑section (8), in order to enable the official liquidator to have in his custody or under his control in cash as much of the assets of a banking company as possible, the securities given to every secured creditor maybe redeemed by the official liquidator-
(a) where the amount due to a creditor is more than the value of the securities as assessed by him or, as the case may be, assessed by the official liquidator. on payment of such value; and
(b) where the amount due to the creditor is equal to or less than the value of the securities as so assessed, on payment of the amount due.
(8) Where the. official liquidator is not satisfied with the valuation made by a creditor, he may apply to the High Court for making a valuation.
(9) When any depositor, claimant or creditor to whom any payment is to be made in accordance with the foregoing provisions, cannot be found or is not readily traceable, adequate measures shall be taken by the official liquidator for such payment.
(10) For tile purposes of this section, tile payments specified in cash of the following clauses shall be treated as payments of a different class, namely:
(a) Payments to depositors pursuant tar sub-sections (2) and (4);
(b) payments to depositors pursuant to clause (a) of sub-section(5):
(c) payments to preferential claimants pursuant to clause (b) of sub‑section (5); and
(d) payments to the general creditors pursuant to clause (c) of sub‑section (5).
(11) The payments to persons in each different class as specified in sub‑section (10) shall rank equally among themselves and be paid in full unless the assets are insufficient to meet them, in which case they shall abate in equal proportion.”