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Functions of a Bank Company

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Section 7-Business of Banking Companies

(1) In addition to the business of banking, a banking company may engage in all or any of the following forms of business, namely:-

a) The borrowing, raising or taking up of money;

b) The lending or advancing of money either upon or without security;

c) The granting and issuing of letters of credit, traveller’s checks, and circular notes; the receiving of all kinds of bonds or other valuables on deposit or for safe custody or otherwise;

d) Providing vaults for the safety of the deposits;

e) Collecting and transmitting of money against securities

Section 9-Prohibition of certain forms of trading

 No banking company shall directly or indirectly deal in the buying, selling or bartering of goods, except in connection with the realisation of security given to or held by it, or engage in any trade or buy, sell or barter goods for others otherwise than in connection with bills of exchange received for collection or negotiation or with such of its business as is approved under section 7.

Section 13-Minimum paid up capital and reserves

(1) Unless it has paid-up capital and reserves of such aggregate value as is required by this section

a) no banking company in existence on the commencement of this Act shall, after the expiry of two years from such commencement, if it is incorporated in Bangladesh and of six months, if it is incorporated outside Bangladesh, carry on business in Bangladesh; and
b) no other banking company, except the banking companies mentioned in clause a), shall commence its business after the commencement of this Act:
Provided that the Bangladesh Bank may, if it thinks fit in any particular case, extend the period referred to in this sub-section by a further period not exceeding one year in the case of banking companies incorporated in Bangladesh and six months in the case of banking companies incorporated outside Bangladesh.

Section 14(A)-The shares of a bank shall not be concentrated on any person,company or membres of a join familly, no company or members alone jointly or both more than 10% of the shares of a bank.

Section 14(AA) Significant Shareholder -Holding of more than 5% share

Section 15-Election of new directors

  • The Bangladesh Bank may, by order, require any banking company except new and special banks to call a general meeting of the company within two months from the date of the order or within such further time as the order may allow in this behalf, to elect in accordance with the provisions of this ordinance new directors.
    (2) Every director elected under subsection (1) shall hold office until the date up to which his predecessor would have held office, if the election had not been held.
    (3) Any election duly held under this section shall not be called in question in any court.
    (4) The Bangladesh Bank may, by general order, make provisions to the effect that no banking company except new and special banks shall appoint its managing directors or chief executive officers, whatever be the name of the office, without the previous approval of the Bangladesh Bank and no managing director or chief executive officer appointed in this way shall be removed from his office, acquitted or dismissed without the previous approval of the Bangladesh Bank.

Section 15AA- The Highest tenure of the director of a bank company shall be consecutive term of 9years.

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