An Ordinance further to amend the Banking Companies Ordinance, 1962
[Gazette of Pakistan, Extraordinary, Part I, 8th October, 1979]
No. F.17(1)/79?Pub.?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 (LVII 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 the fifth day of July, 1977, read with the Laws (Continuance in Force) Order, 1977 (C. M. L. A, Order No. 1 of 1977), and in exercise of all powers enabling him in that behalf, the President is pleased to make and promulgate the following Ordinance
1. Short title and commencement
(1) This Ordinance may be called the Banking Companies (Amendment) Ordinance, 1979.
(2) It shall come into force at once.
2. Amendment of section 27, Ordinance LVII of 1962
In the Banking Companies Ordinance, 1962 (LVII of 1962), hereinafter referred to as the said Ordinance, in section 27, for subsection (1) the following shall be substituted, namely
“(1) No individual or association or body of individuals, not being a company, shall carry on banking business in Pakistan and, save as hereinafter provided, no company shall carry on banking business in Pakistan unless it holds a licence issued in that behalf by the State Bank ; and any such licence may be issued subject to such conditions as the State Bank may think fit to impose.”.
3. Insertion of new Part II?A, Ordinance LVII of 1962
In the said Ordinance, after Part II, the following new Part shall be inserted, namely :.?
43?A. Power to?call for certain information, etc.?Where it appears to the State Bank that a company or any other person is transacting in any manner or form whatsoever the business of banking in contravention of subsection (1) of section 27, the State Bank may?
(a) direct the company or such other person, or any person Who is, or has at any time been, dealing, doing business or associated in any manner with the company or such other person, to give or furnish to the State Bank, within such time as the State Bank may specify in its requisition, such information, documents or records respecting any business carried on by the company or such other person as may be within its or his knowledge or in or under its or his possession, custody or control ;
(b) authorise any person to enter and search any premises and seize books, accounts or other documents or records respecting any business carried on by the company or such other person as may be in or under the possession, custody or control of the company or such other person or a person who is, or has at any time been, dealing, doing business or associated in any manner with the company or such other person, or any officer or employee of the company or such other person or of the person dealing, doing business or associated with the company or such other person ;
(c) inspect or examine, or cause to be inspected or examined, the com*pany or such other person, or a person. who is, or has at any time been, dealing, doing business or associated with it or him as aforesaid, or any officer or employee of the company or such other person or of the person dealing, doing business or associated with the company or such other person, and any of its or his books, accounts or other documents or records referred to in clause (b) ; and
(d) exercise, as tar as may be applicable, in relation to the company or such other person, or any person who is, or has at any time been, dealing, doing business or associated with it or him as aforesaid, the powers conferred on the State Bank by subsections (1), (2), (4) and (5) of section 40.
43?B. Power to make declaration.?(1) Where the State Bank, after making such inquiries as it may deem fit, is of opinion that a company or person referred to in section 43?A is transacting in any manner or form whatsoever the business of banking in contravention of subsection (1) of section 27, the State Bank may, after giving the company or such person an opportunity of showing cause against the proposed action being taken, make a declaration to that effect.
(2) The State Bank shall publish, or cause to be published, a declaration made under subsection (1) in the newspaper having wide circulation in the area in which the registered office of the company, or the principal office of the person, to which or to whom the declaration relates is situated ; and, upon such publication, the company or such person or the chief executive, by whatever name called, or directors of the company or the manager, officers employees or agents of the company or such person, or any other person referred to in subsection (1), (3) or (4) of section 43?D or section 43?E, shall not be heard to plead ignorance of the making of the declaration.
(3) A declaration under subsection (1) shall, for the purposes of this Part, be conclusive proof of the fact stated therein.
3?C. Consequences of a declaration under section 43?B.??(1) A company or other person in respect of which or whom a declaration has been made under subsection (1) of section 43?B shall, on the publication of such declaration in pursuance of subsection (2) of that section, cease to function or to transact business and any transaction with such company or person, or with any person acting or purporting to act for and on behalf of such company or person, on or after the publication of the declaration as aforesaid, shall be void.
(2) The provisions of subsection (1) and sections 43?D, 43?E and 43?F shall, as far as may be, apply to a company or undertaking which is an associated undertaking of a company or person in respect of which or whom a declaration under subsection (1) of section 43?B is made.
Explanation.?In this subsection, “undertaking” and “associated undertaking” have the same meaning as in the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance, 1970 (V of 1970).
43?D. Deposit of cash and preservation of assets, etc. ? (1) Notwithstand*ing anything contained in section 43?C, where a declaration under sub*section (1) of section 43?B has been made in respect of a company or other person, every person who has in his possession or custody, or under his control, any moneys, movable properties, shares, securities of any description or title deeds relating to property which belong to the company or such other person shall forthwith deposit, or cause to be deposited, such moneys, movable properties, shares, securities and title deeds with any of the banks referred to in the Schedule to the Banks (Nationalization) Act, 1974 (XIX of 1974), or the State Bank or any person authorised by the’ State Bank in this behalf.
(2) If any person who is required by subsection (1) to deposit, or to cause to be deposited, any moneys, movable properties, shares, securities or title deeds fails to do so within two days of the publication of the declaration under subsection (1) of section 43?B, any person authorised by the State Bank in this behalf may enter and search any premises and seize such moneys, movable properties, shares, securities or title deeds and deposit, or cause to be deposited, the same in accordance with subsection (1).
(3) Until such time as an official liquidator, official assignee, interim receiver, receiver or official receiver, as the case may be, appointed by the Court on an application made under section 43?F takes over the possession, custody or control of any books, documents records and assets of a company or person in respect of which or whom a declaration under subsection (1) of section 43?B has been made, including any actionable claims to which such company or person is, or appears to be, entitled, the chief executive, by whatever name called, and a director of such company or a manager, officer and agent, of such company or person, and every other person who may have in or under his possession, custody or control such books, documents, records, assets or claims, shall preserve, and aid in preserving, such books, documents, records, assets and claims and shall, without prejudice to any other liability that he may incur, be jointly and severely liable for any loss or damage.
(4) Every person who is, or becomes, indebted in any manner to a company or person in respect of which or whom a declaration under sub*-section (1) of section 43?B has been made shall, during the period between the date on which such declaration is published and the date on which an order for winding up or, as the case may be, an order of adjudication is made by the Court, repay the amount of the debt by depositing, it in the manner provided for in subsection (1) and inform the State Bank in writing of his having done so.
(5) In computing the period ‘prescribed by Lamination Act, 1908 (IX of 1908), for any suit, appeal or application in respect of anything arising from actions which, immediately before the commencement of the Banking Companies (Amendment) Ordinance, 1979, were pending against a company or person in respect of which or whom a declaration under subsection (1) of section 43?B has been made, or in respect of any action to the filing of which the company or person may be entitled, the period commencing on the publication of such declaration and ending on the day on which an order for winding up or, as the case may be, an order of adjudication is made by the Court shall be excluded.
43?E. Statement of assets and liabilities to be submitted to State Bank. Within three days of the publication of a declaration under subsection (1) such of section 43?B in respect of a company or other person, or within chief further time as the State Bank may, by order in writing, allow, executive, by whatever name called, and every director of the company and the manager, officer and agent of the company or such person, and every other person having a claim or liability against or towards the company or such person, shall submit to the State Bark a statement showing the assets and liabilities of the company or such person so far as may be known to him.
43?F. Consequential provisions for winding up, etc
(1) Where the declaration made under subsection (1) of section 43?B is in respect of a person other than an individual or a company, such person shall, irrespective of the number of members of which it consists, be deemed to be an unregistered company which may be wound up under Part IX of the Companies Act, 1913 (VII of 1913).
4. Amendment of section 83, Ordinance LVII of 1962
In the said Ordi*nance, in section 83, after subsection (1?A), the following new subsections shall be inserted, namely ?
“(1?B) If any company which is not a banking Company, or a banking company which does not hold a licence under section 27 or the licence granted to which has been cancelled, or any individual or association or body of individuals, transacts the business of banking in Pakistan, the chief executive, by whatever name called, of the company and every director, manager, and other officer of the company, and the individual and every member of the association or body of individuals, shall be deemed to be guilty of such contravention and shall be punishable with imprisonment of either description for a term which may extend to seven years and with fine the amount of which shall not be less than twice the amount of deposits received by the company or, as the case may be, the individual or the association or body of individuals in transacting the business of banking, and shall be ordered by the Court trying the offence to pay the fine within a time to be fixed by the Court or in default to suffer further imprisonment for a term which may extend to five years.
(1?C) Whoever contravenes, or attempts to contravene, or abets the contravention of, the provisions of section 43?A or section 43?C or sub*section (1) or subsection (3) or subsection (4) of section 43?B, or section 43?E shall be punishable with imprisonment of either description for a term which may extend to five years and with fine, and, where the contravention is a continuing one, with a further fine which may extend to ten thousand rupees for every day during which such contravention continues.”
5. Amendment of section 90, Ordinance LVII of 1962
In the said Ordinance, in section 90, after figure and comma “42″, the figures, letters and commas “43?A, 43?B, 43?C, 43?D, 43?E, 43?F”shall be inserted.
6. Amendment of section 91?A, Ordinance LVII of 1962
In the said Ordinance in section 91?A, after the figure “42″, the commas, figures and letters”, 43?A, 43?B, 43?C, 43?D, 43?E, 43?F,” shall be inserted.
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