THE BANGLADESH HOUSE BUILDING FINANCE ORDER. 1973 ( PRESIDENT’S ORDER)

( ACT NO. 7 Of 1973 )

[ 3rd February, 1973 ]

WHEREAS it is expedient to provide for the establishment of the Bangladesh House Building Finance Corporation for the purposes of providing financial facilities for the construction, repair and remodelling of houses 1[at any place] in Bangladesh.

NOW, THEREFORE, 2[in pursuance of] paragraph 3 of the Fourth Schedule to the Constitution of the People’s Republic of Bangladesh and in exercise of all powers enabling him in that behalf, the President is pleased to make the following Order:-

  1. (1) This Order may be called the Bangladesh House Building Finance Corporation Order, 1973.

(2) It extends to the whole of Bangladesh.

(3) It shall come into force on such date as the Government may, by notification in the official Gazette, appoint.

  1. In this Order, unless there is anything repugnant in the subject or context:-

(a) “Board” means the Board of Directors of the Corporation;

(b) “Borrower” means any person or persons or body of persons whether incorporated or not to whom a loan is made by the Corporation for the construction, repair or remodelling of a house;

(c) “Corporation” means the Bangladesh House Building Finance Corporation established under this Order;

(d) “Government” means the Government of the People’s Republic of Bangladesh;

(e) “House” means any building intended for human habitation together with the land upon which it is situated and may comprise of one or more 3[flats, apartments or other] housing units, and structures appurtenant thereto;

4[* * * ]

(f) “Managing Director” means the Managing Director appointed under Article 6 of this Order;

(g) “Order” means the Bangladesh House Building Finance Corporation Order, 1973; and

(h) “Prescribed” means prescribed by rules or regulations under this Order.

  1. (1) A Corporation to be called the Bangladesh House Building Finance Corporation shall be established as soon as may be to carry out the purposes of this Order.

(2) The Corporation shall be a body corporate by the name of the Bangladesh House Building Finance Corporation having perpetual succession and a common seal, with power, subject to the provisions of this Order, to acquire and hold property, both movable and immovable, and shall by the said name sue and be sued.

  1. (1) The authorised capital of the Corporation shall be 5[taka one hundred and ten crores] to be subscribed by the Government from time to time.

(2) The Corporation shall pay to the Government interest at the rate of two percentum per annum on the capital subscribed by the Government under clause (1).

  1. (1) The general direction and administration of the Corporation and its affairs shall vest in a Board of Directors which, with the assistance of the Managing Director, may exercise all powers and do all acts and things which may be exercised or done by the Corporation.

(2) The Board in discharging its functions shall act on commercial considerations and shall be guided on questions of policy by such directions as the Government, which shall be the sole judge whether a question is a question of policy, may give it.

(3) If the Board fails to carry out any direction as aforesaid, the Government may remove the Directors and, notwithstanding anything in Article 7, may appoint other persons in their place to be Directors temporarily until a fresh Board is constituted in accordance with the provisions of that Article.

  1. (1) The Managing Director shall be appointed by the Government for such period and on such salary and terms and conditions of service as the Government may determine.

(2) The Managing Director shall be the Chief Executive Officer and shall, on behalf of the Board, direct and control the whole affairs of the Corporation.

6[(3) The Managing Director may sanction, in respect of each house or a unit thereof, loans not exceeding such ceiling as the Government may, from time to time, fix in this behalf and shall place before the meeting of the Board a list of all loans sanctioned by him for information.]

(4) The Managing Director shall have authority to cancel, sanction and reduce the sanctioned amount and recall loans under Article 25.

(5) In the matters not specifically required by this Order or by rules or regulations made thereunder to be done by the Board, the Managing Director shall in relation to such matter have authority to conduct the business, control functions and manage the affairs.

  1. (1) The Board shall consist of a Managing Director 7[* * *] and not more than five other Directors to be appointed by the Government.

(2) Until the first Board is appointed under clause (1), the Managing Director appointed under Article 6 (1) shall exercise all powers, do all acts and things as may be exercised or done by the Board.

  1. (1) A Director shall hold office during the pleasure of the Government but not for a period exceeding three years.

(2) A casual vacancy in the office of a Director shall be filled in by the appointment of another Director who, subject to the provisions of clause (1), shall hold office for the unexpired period of the term of his predecessor.

(3) No act or proceeding of the Board shall be invalid merely on the ground of the existence of any vacancy, or any defect in the composition of the Board.

  1. No person shall be or shall continue to be a Director who-

(a) is a salaried official of the Corporation other than the Managing Director, or

(b) is or at any time has been adjudicated insolvent, or

(c) is found to be a lunatic or of unsound mind, or

(d) is or at any time has been convicted of an offence which in the opinion of the Government is an offence involving moral turpitude, or

(e) is subject to a disqualification imposed by or under any law for the time being in force to hold any public office, or

(f) is a minor.

  1. A person shall cease to be a Director if he absents himself from three consecutive meetings of the Board without leave of absence from the Chairman.

8[10A. (1) The Government shall appoint one of the Directors other than the Managing Director to be the Chairman of the Board.

(2) Subject to his continuing to hold office as a Director, the Chairman shall hold office as Chairman for the terms of his office as Director and shall be eligible for re-appointment.

(3) In the event of a casual vacancy in the office of the Chairman a successor shall be appointed by the Government from amongst the Directors for the unexpired term or for the period of absence, as the case may be, but the person so appointed shall not hold office beyond the date of expiry of the term of office of his predecessor.]

  1. (1) The Corporation may 9[, subject to other provisions of this Article,] appoint or employ such persons as it considers necessary for efficient performance of its functions on such terms and conditions as it may determine.

(2) Every officer or other employee of the 10[House Building Finance Corporation established under the House Building Finance Corporation Act, 1952,] in Bangladesh shall become on the commencement of this Order, an Officer or other employee, as the case may be, of the Corporation and shall hold office or service in the Corporation on the same terms and conditions and with the same right and privileges as to Provident Fund, gratuity, pension and other matters as were enjoyed by him immediately before such commencement and shall continue to do so unless and until his employment in the Corporation is terminated or until his remuneration or terms and conditions are duly altered by the Corporation:

Provided that an officer or other employee may, within such time as may be specified by the Corporation, exercise his option to continue in the service of the Corporation:

Provided further that the Government may alter the terms and conditions of service of an officer or employee if such alteration is considered necessary for the sake of uniformity and in the interest of equity in service.

(3) Notwithstanding anything contained in any terms and conditions of services or in any award, settlement or agreement for the time being in force, the Corporation may, with the prior approval of the Government, alter the remuneration (whether by way of reduction or otherwise) and other terms and conditions of service of any officer or other employee of the Corporation, and if such alteration is not acceptable to an officer or other employee, the Corporation may terminate his employment by giving him compensation equivalent to three months’ remuneration in case of a permanent officer or employee and one month’s remuneration in case of temporary officer or employee.

Explanation.- The compensation to an officer or other employee under clause (3) shall be in addition to any pension, gratuity or other benefit to which the officer or other employee may be entitled under the terms and conditions of his service.

(4) If any question arises as to whether or not any person was an officer or other employee 11[ of the House Building Finance Corporation established under the House Building Finance Corporation Act, 1952,] immediately before the commencement of this Order, the question shall be referred to the Government whose decision shall be final and binding on the parties.

12[(5) Notwithstanding anything contained in this Article, the Government may appoint a General Manager of the Corporation on such terms and conditions as it may determine.]

  1. The Corporation may appoint a Standing Committee of 13[experts] to be called the Technical Advisory Committee to give it technical advice on schemes submitted to the Corporation for financial assistance or on any point that may be referred to the Committee by the Board.
  2. (1) The meetings of the Board shall be held at such times and at such places as may be prescribed, provided that until regulations are made in this behalf such meetings shall be convened by the Chairman of the Board.

(2) To constitute a quorum at a meeting of the Board, the number of Directors present shall be three if the Board consists of 14[six] Directors and two if the Board consists of less than 15[six] Directors.

(3) At meetings of the Board each Director present shall have one vote and in the event of an equality of votes, the Chairman shall have a second or casting vote.

(4) No Director shall vote on any matter relating to any application for a loan in which he is directly or indirectly interested.

(5) If for any reason the Chairman is unable to be present at a meeting of the Board, a Director authorised in writing by the Chairman shall preside at the meeting, and in the absence of any such authorisation the Directors present shall elect a Chairman to preside at the meeting.

  1. The non-official Director, if any, shall be paid such fees for attending meetings of the Board as may be prescribed.
  2. The Corporation shall have its Head Office at Dacca and shall establish Zonal, Regional and Sub-Regional Offices and agencies at such places as the Board, with the concurrence of the Government may determine.
  3. The Corporation may open deposit accounts with any bank or banks as may be decided by the Managing Director.
  4. The Corporation may invest its funds in such securities or in such other manner as may be prescribed and may sell or mortgage such securities.
  5. (1) The Corporation may, with the prior approval of the Government, raise funds for the purpose of raising its 16[own] capital by issuing bonds and debentures carrying interest at such rates as may be approved by the Government:

Provided that the total amount due by the Corporation on such bonds and debentures and on other liabilities, contingent or otherwise of the Corporation, shall not at any time be allowed to exceed 17[fifteen] times aggregate amount of the paid-up share capital and the reserve fund of the Corporation.

(2) The repayment of the principal and the payment of interest due on the bonds and debentures issued by the Corporation shall be guaranteed by the Government.

  1. (1) The Corporation may accept deposits on such terms and conditions as may be approved by the Government.

(2) The Corporation may accept loan from the Government on such terms and conditions as may be determined by it.

  1. Subject to the provisions of this Order, the Corporation may grant loans to borrowers for the purpose of constructing, repairing and remodelling houses.
  2. (1) No loan shall be made unless it is fully secured by a mortgage, hypothecation or assignment of the land and the house to be constructed, repaired or remodelled thereon or by such other immovable or movable property of the borrower or of his surety 18[or of] both as may be prescribed:

Provided that where the land on which it is proposed to construct, repair or remodel the house is held by the borrower not as owner but as mortgagee, lessee, sub-lessee or in any other capacity, then, notwithstanding anything to the contrary contained in any other law for the time being in force, loan may be made against the security of such land and the house to be constructed, repaired and remodelled thereon.

(2) All loans shall be made in suitable instalments concomitant with the construction, repair or remodel of the house.

(3) No property shall be accepted as security unless it is free from all encumbrances and charges, and it shall be one of the terms upon which the loan shall be made that the property and the house in respect of which the loan is made shall not be sold or charged without the prior approval of the Corporation 19[and any sale, transfer made or charge or encumbrance created without the approval of the Corporation in respect of such property shall be null and void].

(4) Notwithstanding anything contained in clause (3), the Corporation may, subject to the maximum limit prescribed in Article 22, grant additional loans to any borrower on the security of any property already mortgaged with the Corporation, and offered by that borrower and accepted by the Corporation as security for the purpose.

(5) No loan shall be made to any borrower unless he or where the borrower is more than one person any one or more of such persons is a member of an approved Housing Society, or unless the borrower satisfies the Corporation that the terms upon which he had acquired the land on which the house was to be constructed, repaired or remodelled, or the terms of the lease under which the land was made available were satisfactory and that the area in which the house was to be situated had been adequately planned.

(6) No loan shall be made unless the Corporation is satisfied-

(a) that the borrower will be able to provide the necessary funds which added to the loan made by the Corporation, will cover the entire cost of the construction, repairing or remodelling of the house;

(b) that the borrower or his surety or both as the case may be and where the borrower is more than one person, any one or more of such persons or their sureties, will have sufficient means to repay the loan during the prescribed period in the prescribed manner;

(c) that adequate care has been taken to ensure that the house would be of an economical and suitable design and of a sound construction, and of a type which would assure a minimum of practicable expenditure for repairs and maintenance during the term of the loan.

(7) Before accepting any movable or immovable property as security, due allowance shall be made for depreciation and probable fall in value and whenever such property is found to fall in value below the margin allowed, additional security shall be obtained.

(8) The loan shall be repayable in monthly instalments sufficient to cover the principal and the interest in such manner as may be prescribed.

(9) No loan shall be given for a period exceeding 20[32] years.

(10) The rate of interest chargeable on loans made by the Corporation shall be determined by the Government from time to time.

(11) Every agreement between the borrower and the Corporation shall provide for the period within which the construction, repairing or remodelling of the house shall be commenced and completed.

(12) No information given by any person applying for financial assistance and communicated to any of the Directors or employees of the Corporation shall be disclosed by or used by such Directors or employees except for the lawful purposes of the Corporation without the written consent of such person.

(13) No loan shall be given to any 21[borrower unless he] conforms to such conditions as may be prescribed.

22[22. The Corporation shall not grant any loan of an amount which is less than Taka two thousand or of an amount which is, subject to such ceiling as the Government may, from time to time, fix in this behalf, more than that required to meet the cost of construction, repairing or remodelling of a house or a unit thereof.]

  1. (1) The Corporation shall make such agreements with borrowers as it may deem necessary or expedient to safeguard its interest.

(2) The Corporation may require the borrower to pay application and inspection fees at such rates as may be prescribed.

  1. The Corporation shall not-

(a) accept any deposits except as provided by this Order; or

(b) subscribe directly to the shares or stock of any company; or

(c) undertake construction, repairing or re-modelling of houses except with prior approval of the Government. Provided that nothing in clause (b) shall affect the right of the Corporation to acquire the shares or stock of any company accepted as security from the borrower.

  1. Notwithstanding any agreement to the contrary, the Corporation may by notice require any borrower to whom it has granted any loan or his surety forthwith to repay the loan in full-

(a) if the borrower or his surety defaults in payment of loan 23[* * * ];

(b) if it is found that the loan was obtained by information supplied by the borrower or his surety which was false or misleading in any material particular; or

(c) if the borrower has committed a breach of the terms of his agreement with the Corporation relating to the loan; or

(d) if the loan is not being utilised for the purpose for which it was made; or

(e) if the house is not constructed or as the case may be, repaired or remodelled within the period allowed in the agreement between the borrower 24[and the] Corporation and the failure is not due to causes beyond the control of the borrower;

(f) if there is a reason to apprehend that the borrower or his surety will be unable to pay his debts or may go into liquidation;

(g) if the property pledged, mortgaged, hypothecated or assigned to the Corporation as security for the loan is not kept in a proper condition by the borrower or his surety or if the property has depreciated in value by more than the prescribed 25[percentage] and the borrower is unable to give additional security to the satisfaction of the Corporation; or

(h) if without the permission of the Board, the house, land or other mortgaged property as security for the loan is in any way disposed of or charged by the borrower or his surety; or

(i) if for any other reason, it is necessary in the opinion of the Board to do so in order to protect the interest of the Corporation.

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