An Ordinance further to amend the Banks (Nationalization) Act, 1974
[Gazette of Pakistan, Extraordinary, Part I, 21st January, 1997]
No.F.2(1)/97?Pub., dated 21?1?1997.???The following Ordinance made by the President is hereby published for general information:?
Whereas it is expedient further to amend the Banks (Nationalization) Act, 1974 (XIX of 1974) for the purposes hereinafter appearing;
And whereas the National Assembly is not in session and the President is satisfied that circumstances exist which render it necessary to take immediate action;
Now, therefore, in exercise of the powers conferred by clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make and promulgate the following Ordinance:??
1. Short title and commencement
(1)’This Ordinance may be called the Banks (Nationalization) (Amendment) Ordinance, 1997.
(2) It shall come into force at once.
2. Amendment of section 3, Act XIX of 1974
In the Banks (Nationalization) Act, 1974 (XIX of 1974), hereinafter referred to as the said Act, in section 3, subsections (3) and (4) shall be omitted.
3. Omission of section 4, Act XIX of 1974
In the said Act, section 4 shall be omitted.
4. Amendment of section 8, Act XIX of 1974
In the said Act, in section 8, subsection (5) shall be omitted.
5. Substitution of section 9, Act XIX of 1974
In the said Act, for section 9 the following shall be substituted, namely:??
“9. Dissolution of the Pakistan Banking Council.??(1) The Pakistan Banking Council (hereinafter referred to as the Council) shall stand dissolved forthwith.
(2) All assets, properties and rights of the Council shall stand transferred to and vest in, all liabilities and other encumbrances of the Council shall stand transferred to and become the liabilities and encumbrances of, the State Bank.
(3) Employees of the Council, including its members,??
(a) who are on deputation or secondment from any public sector financial institution shall revert to, and continue to be employed by, their parent institutions on terms and conditions governing their employment in their parent institutions; and
(b) who do not fall in clause (a) shall become employees of the State Bank on terms and conditions governing their employment with the Council.
(4) Every contract or instrument to which the Council is a party shall continue to be in force and effective as if the State Bank had been a party thereto instead of the Council.
(5) Any legal proceedings or, as the case may be, any application pending before any authority by or against the Council may be continued by or against the State Bank.
(6) Where under any statute or statutory instrument, the Chairman or a member of the Council is nominated for a specified assignment or task, the vacancy caused by operation of this section shall be filled by a person nominated by the State Bank.”.
6. Substitution of section 10, Act XIX of 1974
In the said Act, for section 10 the following shall be substituted, namely:??
“10. Transfer and using of funds.??All sums standing to the credit of the Council in the fund constituted heretofore shall stand transferred to, and vest in
the State Bank.”
7. Substitution of section 11, Act XIX of 1974
In the said Act, for section 11 the following shall be substituted, namely:??
“11. General provisions pertaining to management of banks.??(1) A bank shall have a Board of Directors consisting of??
(a) a Chairman, who shall preside over the meetings of the Board;
(b) a President, who shall be the Chief Executive; and
(c) not less than five and not more than seven other members.
(2) The Chairman, the President and other members of the Board?
(a) shall be appointed by the Federal Government in consultation with the State Bank, for a term of three years, on such terms and conditions as may be fixed by the General Meeting of the Bank: Provided that the Chairman or the President shall be appointed from amongst professional bankers whose names are included in a panel of bankers qualified to be the President or the Chairman, which panel shall be determined, maintained and varied, from time to time, by :he State Bank;
(b) may be removed for misconduct before the expiry of the three years :erm by the Federal Government in consultation with the State Bank;
(c) shall stand removed if he becomes ineligible on any of the grounds specified in subsection (11);
(d) may be re?appointed by the Federal Government, in consultation with the State Bank of Pakistan, for a further period of three years.
(3) The general direction and superintendence of the affairs and )usiness of a bank, and overall policy making in respect of its operations, shall rest in its Board.
(4) The Board shall detetmine???
(i) the credit policies of the Bank;
(ii) evaluation criteria for the performance of the employees of the Bank ether than the President;
(iii) personnel policies of the bank;
(iv) guidelines for entering into any compromise with borrowers and ether customers of the bank; and
(v) any other policy matter.
(5) The Chief Executive and other officers of the Bank shall act in accordance with the policies, criteria and guidelines determined by the Board.
(6) The Board shall appoint committees from amongst the executives of the Bank, and determine the powers, functions and duties of such committees.
(7) The Chairman shall preside over the meetings of the Board, and in his absence, the. directors may elect one of its members, other than the President, to preside over the meeting.
(8) The President, subject to the control and directions of the Board, shall exercise powers of management of the affairs of the Bank.
(9) All selections, promotions and transfer of employees of banks except the President and decisions as to their remunerations and benefits shall be made by the President in accordance with evaluation criteria and personnel policies determined by the Board.
(10) The Board, the President and other officers shall exercise their powers and discharge their duties in accordance with sound banking principles and prudent banking practices and shall ensure compliance with regulations and directives that may be issued by the State Bank from time to time.
(11) No person shall be eligible for appointment as the President, the Chairman or a member of the Board if???
(a) he is or has at any time been, adjudged an insolvent or has suspended payment or has compounded with his creditors; or
(b) he is a minor or is found lunatic or of unsound mind; or
(c) he is not a citizen of Pakistan; or
(d) he was at any time in the service of Federal Government or a corporation controlled by any such Government or in the service of bank and was dismissed; or
(e) he is a person against whom any action has been taken or any proceedings are pending under section 412 of the Companies Ordinance, 1984 (XLVII of 1984), or section 83 of the Banking Companies Ordinance, 1962 (LVII of 1962); or
(f) he is, or has been, convicted for tax evasion under any law for the time being in force; or
(g) he is a member of the Senate, National Assembly, any Provincial Assembly or an elected Member of a local council constituted under any law relating to local councils; or
(h) he is holding an office in a political party. “
8. Substitution of section 12, Act XIX of 1974
In the said Act, for section 12 the following shall be substituted, namely:??
“12. Fidelity and secrecy.??(1) Every bank, the Chairman and members of the Board and Chief Executive, by whatever name called, shall observe, except as otherwise required by law, the practices and usages customary among bankers and in particular, shall not divulge any information relating to the affairs of its constituents except in circumstances in which it is, in accordance with law or practice and usages customary among bankers, necessary or appropriate for a bank to divulge such information
(2) The President, members of the Board of every bank, every administrator, auditor, adviser, officer or other employee of a bank shall, before entering upon his office, make a declaration of fidelity and secrecy in such form as may be prescribed “
9. Omission of section 15, Act XIX of 1974
In the said Act, section 15 shall be omitted.
10. Amendment of section 16, Act XIX of 1974
In the said Act, in section 16, in clause (a) the commas, words, brackets and figures “, unless other provisions are made for their redisposition in accordance with a scheme prepared under subsection (1) of section 16,” shall be omitted.
11. Substitution of section 18, Act XIX of 1974
In the said Act, for section 18 the following shall be substituted, namely:??
“18. Indemnity.??No suit, prosecution, or other legal proceedings shall lie against the Federal Government, the State Bank, the President or Directors o: the Board, of a bank or any officer of the Federal Government or the State Bank or a bank for anything in good faith done or purporting to be done under this Act or any rule or order made or direction issued thereunder or for any damage caused or likely to be caused by anything done or purporting to be done as aforesaid.”.
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