Trust Deed Constituting Guarantee Fund
This deed of trust is made this ……………… day of ……………… 2000 between X Bank Ltd., a banking company registered under the Companies Act 1956 and carrying on business at …………………… (hereinafter called the bank which term shall include its successors) of the one part and AB son of …………… residing at ………………… and CD son of ………………… residing at …………… (hereinafter called the trustees) of the other part.
Whereas the bank has determined to establish a guarantee fund for the purposes hereinafter appearing: And whereas the said AB and CD have agreed to act as trustees for the purposes of these presents.
Now, therefore, it is agreed as follows:
1. A fund, to be called ‘the guarantee fund’, shall be established and such fund shall be formed by contributions to be made by officers and clerks in the employment of the bank, who shall become subscribers to the said fund in the manner following:
2. Every officer or clerk who desires to become a subscriber to the said fund shall apply to the bank to fix the amount of his security and, when that has been fixed, shall sign and deliver to the bank a letter as follows:
‘To the X Bank Ltd.
‘Gentlemen, ………………………My security having been fixed by you at Rs. …………………, I beg to apply for liberty to become a subscriber to the guarantee fund in respect of a guarantee of Rs. ……………………, and I request your consent thereto, and in consideration thereof agree to be bound by the provisions of the trust deed constituting the said fund.
3. It shall be for the bank to determine whether an applicant as aforesaid shall or shall not be admitted to subscribe to the fund, and notice of such determination shall be given to such applicant.
4. A register of subscribers to the said fund shall be kept by the bank, and in such register there shall be entered the name of each subscriber to the fund, and the amount of the guarantee in respect of which he subscribes, and the time from which he is a subscriber for that amount, and the time when he ceases to be a subscriber.
5. Every applicant, who is admitted to subscribe as aforesaid, shall be bound to contribute to the fund a premium of 5% per annum on the amount fixed as his security, and such contribution must be made by equal quarterly payments on the usual quarter days.
(Provision may be made for contributions by the company, e.g., a sum equal to the yearly contributions of the subscribers until the fund amounts to a specified sum, and that when the fund amounts to that sum subscribers who have subscribed for 10 years shall not pay further subscriptions unless and until the fund is reduced to less than the specified amount. Sometimes it is provided that when the fund exceeds a specified sum, the surplus shall be carried to the superannuation fund).
6. If any subscriber makes default for more than seven days in paying any contribution due from him as aforesaid, the bank may, by notice in writing, exclude such subscriber from the benefit of the fund and thenceforth he shall forfeit all interest in the fund, but the bank, in its discretion, may annual any such forfeiture on such terms and conditions as it may think expedient.
7. The fund shall be treated as a security to the bank against all defalcations and misfeasances by the subscribers thereto for the time being, but as regards each subscriber, such security shall be limited to the amount in respect of which he has been a subscriber.
8. Wherever the bank certifies under its seal that any subscriber to the fund has been guilty of any defalcation or misfeasance, and the amount necessary to compensate the bank therefor, then and in any and every such case the bank may withdraw from the fund and appropriate a sum equal to the amount so certified, but not exceeding the amount of the security in respect of which such employee has been contributing.
9. In the event of any subscriber to the fund voluntarily retiring from the service of the bank, or dying, such subscriber, or his legal personal representatives, as the case may be, shall, provided such subscriber has not been guilty at any time of any defalcation or misfeasance in relation to the bank, be entitled to payment out of the fund of a sum equal to one-half the amount of the premiums paid by him to the fund.
10. A subscriber to the fund, who is dismissed by the bank from its service for any cause whatsoever, shall forfeit all interest in the fund.
11. All contributions to the fund shall be paid to the bank, and the bank shall keep a proper account thereof; but it shall not be bound to keep such contributions separate from the general assets of the bank, or be regarded as a trustee of such fund.
12. The bank may at any time by deed dissolve the fund, and in that case the fund shall be applied, first, in making good to the bank all sums certified by the bank under clause (8) hereof, and the surplus shall be applied, so far as the same may extend, in paying off to each subscriber who has not been guilty of any defalcation or misfeasance in relation to the bank, one-half the amount of the premiums subscribed by him, and the residue shall belong to the bank.
13. The bank may at any time by deed alter all or any of the regulations and provisions herein contained, and may make new regulations and provisions to the exclusion of or in addition to all or any regulations and provisions herein contained, and any regulations and provisions so made by deed shall be deemed to be regulations and provisions of the same validity as if they had been originally contained in these presents and shall be subject in like manner to be altered or modified.
14. The bank may at any time, and from time to time, appoint any of the officers of the bank to act as a consultative committee for the purposes of these presents, and may from time to time define the duties and powers of such committee, and may modify or dissolve such committee.
15. Nothing herein contained shall prevent the bank from requiring or taking from any subscriber to the fund any additional or special security for his fidelity.
16. The personal liability of every subscriber to the fund to make good his defalcations and misfeasances shall remain and subsist in every respect as if the said guarantee fund had not been established and each subscriber shall enter into a bond for faithful service framed in accordance with the form approved by the bank.
17. The statutory power of appointing new trustees hereof shall be vested in the bank.
The Schedule above referred to
In witness whereof the parties herein have executed these presents on the day, month and year first above-written.
Signed, sealed and delivered by AB and CD the trustees in token of their acceptance of Trusteeship in the presence of:
Signed, sealed and delivered by Mr. …………… pursuant to Board Resolution dated ……………… of X Bank Ltd. in the presence of: