THE BANGLADESH BANK ORDER, 1972 (PRESIDENT’S ORDER) ( PRESIDENT’S ORDER NO. 127 OF 1972 ), PART 2

42. In this Chapter, unless the context otherwise requires,-

(a) “banking company” means the banking company as defined in ⁸³[clause (cc) of article 2 of this Order] and includes the apex co-operative bank or any other banking or financial institution notified by the Government in this behalf;

(b) “borrower” means any person to whom any credit limit has been sanctioned by any banking company, whether availed of or not, and includes-

(i) in the case of a company or corporation, its subsidiaries;

(ii) in the case of a Hindu undivided family, any member thereof or any firm in which such member is a partner;

(iii) in the case of a firm, any partner thereof or any other firm in which such partner is a partner; and

(iv) in the case of an individual, any firm in which such individual is a partner;

(c) “credit information” means any information relating to-

(i) the amounts and the nature of loans or advances and other credit facilities granted by a banking company to any borrower or class of borrowers;

(ii) the nature of security taken from any borrower for credit facilities granted to him; and

(iii) the guarantee furnished by a banking company for any of its customers.

43. The Bank may-

(a) collect, in such manner as it may think fit, credit information from every banking company; and

(b) furnish such information to any banking company in accordance with the provisions of Article 45.

44. (1) For the purpose of enabling the Bank to discharge its functions under this Chapter, it may at any time direct any banking company to submit to it such statements relating to such credit information and in such form and within such time as may be specified by the Bank from time to time.

(2) A banking company shall, notwithstanding anything to the contrary contained in any other law for the time being in force or in any instrument regulating the constitution thereof or in any agreement executed by it relating to the secrecy of its dealing with its constituents, be bound to comply with any direction issued under clause 1.

45. (1) A banking company may, in connection with any financial arrangement entered into or proposed to be entered into by it with any person, make an application to the Bank in such form as the Bank may specify requesting it to furnish the applicant with such credit information as may be specified in the application.

(2) On receipt of an application under clause (1), the Bank may, as soon as may be, furnish the applicant with such credit information relating to the matters specified in the application, as may be in its possession:

Provided that the information so furnished shall not disclose the names of the banking companies which have submitted such information to the Bank.

(3) The Bank may in respect of each application levy such fees, as it may deem fit, for furnishing credit information.

46. (1) Any credit information contained in any statement submitted by a banking company under Article 44 or furnished by the Bank to any banking company under Article 45 shall be treated as confidential and shall not, except for the purposes of this Chapter, be published or otherwise disclosed.

(2) Nothing in this Article shall apply to-

(a) the disclosure by any banking company, with the previous permission of the Bank, of any information furnished to the Bank under Article 44;

(b) the publication by the Bank, if it considers necessary in the public interest so to do, of any information collected by it under Article 44, in such consolidated form as it may deem fit without disclosing the name of any banking company or its borrowers.

(3) Notwithstanding anything contained in any law for the time being in force, no Court, tribunal or ⁸⁴[other authority except Parliament] shall compel the Bank or any banking company to produce or to give inspection of any statement submitted by that banking company under Article 44 or to disclose any credit information furnished by the Bank to that banking company under Article 45.

48. (1) If any banking company-

(a) fails to submit any statement required under Article 44 or submits under the Article a statement which is false in any material particular; or

(b) fails to comply with any condition imposed under this Chapter, every director or other officer of the company and every other person who is knowingly a party to the breach shall be punishable with fine which may extend to ⁸⁵[Taka five lakh].

(2) If any person discloses any credit information, the disclosure of which is prohibited under Article 46, he shall be punishable with imprisonment which may extend to six months or with fine which may extend to ⁸⁶[Taka one lakh] or with both.

60. (1) The Bank may establish and maintain a Fund to be called the Rural Credit Fund to which shall be credited-

(a) an initial sum of Taka 50 lakhs to be subscribed by the Government; and

(b) appropriations of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government.

(2) The Rural Credit Fund may be applied by the Bank to the following objects, namely:-

(a) The making of medium-term loans and advances to co-operative banks, repayable on the expiry of a fixed period, no exceeding five years from the date of the making thereof, against such security as the Bank may, from time to time, specify in this behalf;

(b) The making of medium-term and long-term loans and advances to rural credit agencies created or established by or under any law for the time being in force including scheduled banks on such terms and conditions as the Bank may, from time to time, specify in this behalf;

(c) Where the Bank is satisfied that any co-operative bank or any scheduled bank to which a loan or advance as is referred to in clause (4) of Article 16 has been made is unable to repay the same in time, the converting of such loan or advance, into a medium-term loan or advance, as the case may be, in accordance with the provisions of sub-clause (a);

(d) The making of short-term and medium-term loans and advances to scheduled banks as refinance against their loans and advances to co-operative societies or farmers or dealers supplying seed, machinery, fertiliser and other requisites of agriculture to farmers on credit:

Provided that such credit is granted on such terms and conditions as to security and otherwise; as may be laid down by the Bank; and

(e) The financing of a system of guarantees in accordance with rules to be made by the Bank to cover a portion of the bona fide loss that a scheduled bank is proved to the satisfaction of the Bank to have incurred in any transaction of loan or advance made under sub-clause (d).

61. The Bank may establish and maintain a fund to be called “Agricultural Credit Stabilisation Fund” to which shall be credited:

(a) an initial sum of Taka 25 lakhs to be subscribed by the Government; and

(b) appropriation of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government;

(c) the amount in the said Fund shall be applied by the Bank only to the making of loans and advances to apex co-operative Bank repayable on the expiry of a fixed period of not less than fifteen months and not exceeding five years from the date of making such loan or advance and on such terms and conditions as may be specified in this behalf by the Bank:

Provided that no such loans or advances shall be made-

(i) except for the purpose of enabling the apex co-operative Bank to pay any dues in respect of bills of exchange and promissory notes, purchased or rediscounted by the Bank under sub-clause (f) of clause (2) of Article 16 or loans and advances made to it by the Bank under clause (6) of Article 16 and unless, in the opinion of the Bank the apex co-operative Bank is unable to pay such dues in time due to draught, famine or natural calamities; and

(ii) Unless such loans and advances are fully guaranteed as to the repayment of the principal and payment of interest by the Government.

62. (1) The Bank may establish and maintain a Fund to be called the Industrial Credit Fund to which shall be credited-

(a) an initial sum of Taka one crore to be subscribed by the Government; and

(b) appropriations of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government.

(2) The Industrial Credit Fund shall be applied by the Bank to the following objects, namely :-

(a) The making of medium-term and long-term loans and advances to co-operative banks and such institutions as the Bank may deem fit repayable on the expiry of a fixed period, not exceeding five years from the date of the making thereof, against such security as the Bank may, from time to time, prescribe in this behalf;

(b) The making of medium-term and long-term loans and advances to industrial credit agencies created or established by or under any law for the time being in force on such terms and conditions as the Bank may, from time to time, prescribe in this behalf; and

(c) Where the Bank is satisfied that any institution to which a loan or advance as referred to in clause (4) of Article 16 has been made is unable to repay the same in time, the converting of such loan and advance into a medium-term or long-term loan or advance, as the case may be, in accordance with the provisions of sub-clause (a); and

(d) The financing of a system of guarantees in accordance with rules to be made by the Bank to cover a portion ⁸⁷[* * *] of any bona fide loss that a scheduled bank is proved to the satisfaction of the Bank to have incurred in any transaction of medium-term and long-term loan to a party seeking to establish an industrial project of small or medium size.

63. (1) The Bank may establish and maintain a Fund to be called the Export Credit Fund to which shall be credited-

(a) an initial sum of Taka one crore to be subscribed by the Government, and

(b) appropriations of such amount from the surplus profits of the Bank as may be determined by the Bank in consultation with the Government.

(2) The Export Credit Fund shall be applied by the Bank to the following objects, namely :-

(a) The making of medium-term and long-term loans and advances to scheduled banks and other credit institutions created or established by or under any law for the time being in force, as refinance against their medium-term and long-term loans and advances given for financing exports from Bangladesh, on such terms and conditions as to security and otherwise as the Bank may, from time to time, lay down in this behalf;

(b) The making of loans and advances, directly or through scheduled banks or other credit institutions created or established by or under any law for the time being in force, to private or Government sponsored institutions in foreign countries, for the purpose of enabling them to import goods from Bangladesh, on such terms and conditions as the Bank may, from time to time, lay down in this behalf.

65. (1) Not less than two Auditors shall be appointed and their remuneration fixed by the Government.

(2) The Auditors shall hold office for such term not exceeding one year as the Government may fix while appointing them, and shall be eligible for re-appointment.

67. (1) Every Auditor shall be supplied with a copy of the annual balance sheet and it shall be his duty to examine the same together with the accounts and vouchers relating thereto; and every Auditor shall have a list delivered to him of all books kept by the Bank, and shall at all reasonable time have access to books, accounts and other documents of the Bank, and may, at the expense of the Bank, if appointed under Article 65 or at the expense of the Government if appointed under Article 66, employ Accountants or other persons to assist him in investigating such accounts and may, in relation to such accounts, examine any Director or Officer of the Bank.

71. (1) For the purposes of section 124 of the Evidence Act, 1872, the provisions of Part IV of the Code of Civil Procedure, 1908, and the provisions of rule 27 of Order V, and rule 52 of Order XXI of the said Code, the Bank and any Officer of the Bank acting in his capacity as such be deemed to be a public officer.

(2) The provisions of Section 123 of the Evidence Act shall apply to the unpublished records relating to the affairs of the Bank and the Governor shall be deemed to be the officer or head of the department concerned.

(3) Every Officer of the Bank shall be deemed to be a public servant within the meaning of section 21 of the Penal Code (Act XLV of 1860).

77. (1) If in the opinion of the Government, the Bank fails to carry out any of the obligations imposed on it by or under this Order the Government may by notification in the official Gazette declare the Board to be superseded, and thereafter the general superintendence and direction of the affairs of the Bank shall be entrusted to such agency as the Government may determine and such agency may exercise the power and do all acts and things which may be exercised or done by the Board under this Order.

(2) When action is taken under clause (1) the Government shall cause a full report of the circumstances leading to such action and of the action taken to be laid before the Legislature at the earliest possible opportunity and in any case within three weeks or the re-assembly thereof after the issue of the notification superseding the Board.

78. (1) Except in the performance of his duties under this Order every employee of the Bank shall preserve and aid in preserving secrecy with regard to all matters relating to the affairs of the Bank not published by it, and with regard to all matters relating to the financial or monetary affairs of any institution, person, body of persons, any Government or authority whether in Bangladesh or outside that may come to his knowledge in the performance of his duties.

(2) Every such employees who communicates any such matter, except when required by law to do so or in the discharge of his duty as such shall be guilty of an offence and shall on conviction by a Court of competent jurisdiction be punished with imprisonment of either description for a term which may extend to six months or with fine which may extend to ⁹⁰[Taka five lakh] or with both.

(3) No Court shall take cognizance of any offence punishable under this Article except upon complaint in writing by a person authorised in this behalf by the Governor.

79. (1) The Governor may, by general or special order, delegate to a Deputy Governor, subject to such conditions and limitations, if any, as may be specified in the Order, such of the powers and functions exercisable by him under this Order or under any other law for the time being in force as he may deem necessary for the efficient administration of the functions of the Bank.

(2) The fact that a Deputy Governor exercises any power or does any act or thing in pursuance of this Order shall be conclusive proof of his authority to do so.

80. (1) The Bank may, notwithstanding anything contained in any law for the time being in force or any contract, depute any member of its staff for such period as it may deem fit to the Government or any institution and thereupon the person so deputed shall, during the period of his deputation, render such service to the Government or institution as it may require.

(2) Nothing contained in this Article shall empower the Bank to depute any member of its staff to the Government or any institution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled immediately before such deputation.

81. Whenever the Bank anticipates economic disturbances that are likely to threaten domestic monetary stability in Bangladesh or whenever abnormal movements in the money supply or in the price level are endangering such stability, it shall be the duty of the Bank-

(a) to adopt such policies, and to cause such remedial measures to be taken, as are appropriate in the circumstances and authorised by the Order; and

(b) to submit to the Government ⁹¹[* * *] a detailed report which shall include as a minimum, an analysis of-

(i) the causes of the anticipated economic disturbances or, of the actual abnormal movements of the money supply or the price level;

(ii) the probable effects of such disturbances or movements on the level of production, employment, and real income in Bangladesh, and

(iii) the measures which the Bank has already taken, and the further monetary, fiscal, or administrative measures which it proposes to take or recommends for adoption by the Government.

82. (1) ⁹²[The Board] may make regulations consistent with the Order to provide for all matters for which provision is necessary or convenient for the purpose of giving effect to the provisions of this Order :

Provided that in the event of non existence of the Board, the Governor may, with the approval of the Government make regulations for the purpose of giving effect to the provisions of this Order and generally for carrying out the purposes of this Order.

(2) In particular and without prejudice to the generality of the foregoing provision, such regulations may provide for all or any of the following matters, namely:-

(a) the manner in which meetings of the Board shall be transacted and the procedure to be followed at meetings thereof;

(b) the conduct of the business of the Executive Committee;

(c) the delegation of powers and functions of the Board, the Governor, Deputy Governor, Directors, or Officers of the Bank;

(d) the formation of committees of the Board, their supervision by the Board and the conduct of business in such committees;

(e) recruitment of employees of the Bank including the terms and conditions of their service, constitution of superannuation, beneficial and other funds, with or without Bank’s contribution, for the employees of the Bank, their welfare, providing amenities, medical facilities, grant of loans and advances, their betterment and uplift;

(f) the manner and form in which contracts binding on the Bank may be executed;

(g) the provision of an official seal of the Bank and the manner and effects of its use;

(h) the manner and forms in which the balance- sheet of the Bank shall be drawn up, and in which the accounts shall be maintained;

(i) the remuneration of Directors;

(j) the relations of the scheduled banks with the Bank and the returns to be submitted by the scheduled banks to the Bank;

(k) the regulations of clearing houses for the scheduled banks;

(l) the circumstances in which and the conditions and limitations subject to which, the value of any lost, stolen, mutilated or imperfect Bank Note may be refunded as of grace;

(m) the denomination, form, issue, negotiability, encashment and repatriation of the instruments mentioned in clause (8) of Article 16;

(n) generally, for making any provision necessary or convenient for the efficient conduct of the business, discharge of functions and for purposes of management of the Bank.

⁹³[(2A) Notwithstanding anything contained in this Article, no regulation under sub-clause (h), (i) and (m) of clause (2) shall be made without the prior approval of the Government:

Provided that regulations falling under sub-clause (e) on salary and compensation packages of employees would be subject to the approval of the Government, based on due consideration of skill and competence needed for central banking.]

(3) Copies of all regulations made under this Article shall be available to the public on payment.

84. (1) The State Bank Act, 1956 (Act No. XXXIII of 1956) and the Bangladesh Bank (Temporary) Order, 1971 (A.P.O. No. 2 of 1971) are hereby repealed.

(2) Any rules or regulations made, order passed, notification issued, thing done, action taken or proceedings commenced under any of the provisions of the State Bank Act, 1956 (Act No. XXXIII of 1956), the Bangladesh Bank (Temporary) Order, 1971, (A.P.O. No. 2 of 1971) or deemed to have been so made, passed, issued, done, taken or commenced, shall continue in force and be deemed to have been made, or as the case may be, passed, issued, done, taken or commenced under the corresponding provision of this Order.