Published in Bangladesh Gazette Extraordinary
Dated 30th September, 1993

Act No.27 of 1993

An Act made to provide for the granting of licences to financial institutions, their control and to make other incidental provisions relating thereto

Whereas it is expedient to provide for the granting of licences to financial institutions, their control and to make other incidental provisions relating thereto;

Now, therefore, it is enacted as follows:-
Chapter I

  1. Short title and commencement.-(1) This Act may be called the Financial Institutions Act, 1993.
    (2) It shall be deemed to have come into force on first Bhadra, 1400/ 6th August, 1993, respectively.
  2. Definitions.-Unless there is anything repugnant in the subject or context, in this Act-
  3. a) “financing business” means the business carried on by any financial institution;
    b) “financial institution” means such non-banking financial institutions, which-
  4. i) make loans and advances for industries, commerce, agriculture or building construction; or
    ii) carry out the business of underwriting, receiving, investing and reinvesting shares, stocks, bonds, debentures issued by the Government or any statutuary organization or stocks or securities or other marketable securities; or
    iii) carry out instalment transactions including the lease of machinery and equipments; or
    iv) finance venture capital; and

shall include merchant banks, investment companies, mutual associations, mutual companies, leasing companies or building societies;
c) “credit” means any financial loan on the basis of interest or any loan repayable at a premium, but shall not include loans granted under the condition to issue a debenture or other security to a company or other statutory organization;
d) “creditor” means any person entitled to have returned money deposited by him or any other person;
e) “credit facilities” means-

  1. i) the promise of a financial institution to grant advances and other facilities or to bear liabilities on behalf of a borrower;
    ii) the bearing, on behalf of a borrower, of his other liabilities by a financial institution;
  2. f) “company” means any company registered under the Companies Act, 1913 (VII of 1913);
    g) “Companies Act” means the Companies Act, 1913 (VII of 1913);
    h) “auditor” means any person who, subject to the provisions of this Act, has been appointed to audit the accounts and transactions of financial institutions;
    i) “director” shall also include such persons as perform by order or direction any duty of a director of a financial institution and shall also include alternate and deputy directors;
    j) “regulation” means any regulation made under this Act;
    k) “Bangladesh Bank” means the Bangladesh Bank established under the Bangladesh Bank Order, 1972 (PO No.126 of 1972);
    l) “investment company” means a company primarily or wholly engaged in the buying and selling of securities of other companies, and shall include companies which have at any time invested eighty per cent of its paid-up capital in other companies, but shall not include any banking or insurance company or organization which is a member of the stock exchange;
    m) “building society” means a society which collects savings and grants loans for the construction of buildings and the buying of properties;
    n) “person” means any company, institution or organization;
    o) “banking company” means any banking company established under the Banking Companies Act, 1991 (Act No.14 of 1991);
    p) “merchant bank” means a bank which assumes the responsibilty for the securities of other organizations or companies and gives advice on the amalgamation, or other commercial enterprises, of such customers;
    qu) “mutual association” means a savings association which does not issue capital, stocks and the depositors and borrowers of which are its owners and controllers;
    r) “mutual company” means an organization which is devoid of capital and the net profit of which is distributed among the owners and borrowers in proportion to the business activities;
    s) “leasing company” means a company which leases machines and implements as its business or part of its business or finances such leasing.

3. Act to override other laws.- Notwithstanding anything contained in any other law for the time being in force, the provisions of this Act shall have effect.