THE BANKING COMPANIES ORDINANCE, 1962 (LVII of 1962)
CONTENTS
Part – I
Preliminary
Sections: Pages
1. Short title, extent and commencement. 1
2. Application of other laws not barred. 1
3. Limited application of Ordinance to Co-operative
Banks(Omitted). 2
3A. Limited application of Ordinance to certain financial
institutions. 2
4. Power to suspend operation of Ordinance. 3
5. Definitions:
(a) ―approved securities‖ 3
(b) ―banking‖ 4
(c) ―banking company‖ 4
(d) ―branch‖ or ―branch office‖ 4
(dd) ―creditor‖ 4
(e) ―company‖ 5
(ee) ―debtor‖ 5
(f) ―demand liabilities‖ 5
(ff) ―family members‖ 5
(ffa) ―foreign banking company‖ 5
(g) ―gold‖ 5
(gg) ―loans, advances and credit‖ 5
(h) ―managing director‖ 6
(i) ―prescribed‖ 6
(j) ―private company‖ 6
(k) ―registrar‖ 6
, (l) ―scheduled bank‖ 6
(m) ―secured loans or advance‖ 6
(mm) ―securities‖ 6
(n) ―State Bank‖ 6
(o) ―substantial interest‖ 6
6. Ordinance to override memorandum, articles, etc. 7
Part –II
Business of Banking Companies
7. Form of business in which banking companies may engage. 8
8. Use of the word ―Bank‖ or any of its derivatives. 11
9. Prohibition of trading. 11
10. Disposal of non-banking assets. 12
11. Prohibition of employment of managing agents and
restrictions on certain forms of employment. 12
12. Restrictions on removal of records and documents. 14
13. Requirement as to minimum paid-up capital and reserve. 15
14. Regulation of paid-up capital, subscribed capital and
authorised capital and voting rights of shareholders. 16
15. Election of new directors. 19
15A. Appointment of director by State Bank. 19
15B. Restriction on term of Office of directors. 20
15C. Vacation of Office. 20
16. Restriction on commission, brokerage discount, etc.,
on sale of shares. 20
17. Prohibition of charge on un-paid capital. 21
18. Prohibition of floating charge on assets. 21
19. Restrictions as to payment of dividend. 21
20. Prohibition of common directors. 22
,21. Reserve Fund. 23
22. Cash Reserve. 24
23. Restriction on the nature of subsidiary companies. 24
24. Restrictions on loans and advances. 26
25. Power of State Bank to control advances by banking companies. 26
25A. Power of State Bank to collect and furnish credit information. 28
25AA. Preparation of special reports. 29
25B. Recovery of certain dues of banking companies as arrears
of land revenue. 30
26. Power of State Bank to prohibit acceptance of deposits
by banking companies incorporated outside Pakistan. 30
26A. Deposits. 31
27. Licensing of banking companies. 32
27A. Prohibition of advertising for deposits and collection. 34
27B. Disruptive union activities. 35
28. Restrictions on opening of new, and transfer of existing
places of business. 35
29. Maintenance of liquid assets. 36
30. Assets in Pakistan. 38
31. Unclaimed deposits and articles of value. 39
32. Half-yearly returns and power to call for other returns
and information. 44
33. Power to publish information. 44
33A. Fidelity and secrecy. 44
33B. Guidelines by the State Bank. 45
34. Accounts and balance-sheet. 46
35. Audit. 46
36. Submission of returns. 48
, 37. Copies of Balance Sheets, and Accounts to be sent to
Registrar. 48
38. Display of audited balance sheet by banking companies
incorporated outside Pakistan. 49
39. Accounting provisions of this Ordinance not retrospective. 49
40. Inspection. 49
40A. Responsibility of State Bank. 50
41. Power of the State Bank to give directions. 51
41A. Power of the State Bank to remove directors or other
managerial persons from office. 51
41B. Power of the State Bank to supersede Board of Directors
of a banking company. 53
41C. Limitations. 54
41D. Prosecution of directors, Chief Executives or other Officers. 54
42. Further powers and functions of the State Bank. 55
43. Certain provisions of the Ordinance not to apply to
certain banking companies. 59
Part –IIA
Transaction of Banking Business Illegally
By Companies, Etc.
43A. Power to call for certain information, etc. 59
43AA. Special provisions. 60
43B. Power to make declaration. 62
43C. Consequences of a declaration under section 43B. 63
43D. Deposit of cash and preservation of assets, etc. 64
43E. Statement of assets and liabilities to be submitted to State Bank. 65
43F. Consequential provisions for winding up, etc. 66
Part –III
CONTENTS
Part – I
Preliminary
Sections: Pages
1. Short title, extent and commencement. 1
2. Application of other laws not barred. 1
3. Limited application of Ordinance to Co-operative
Banks(Omitted). 2
3A. Limited application of Ordinance to certain financial
institutions. 2
4. Power to suspend operation of Ordinance. 3
5. Definitions:
(a) ―approved securities‖ 3
(b) ―banking‖ 4
(c) ―banking company‖ 4
(d) ―branch‖ or ―branch office‖ 4
(dd) ―creditor‖ 4
(e) ―company‖ 5
(ee) ―debtor‖ 5
(f) ―demand liabilities‖ 5
(ff) ―family members‖ 5
(ffa) ―foreign banking company‖ 5
(g) ―gold‖ 5
(gg) ―loans, advances and credit‖ 5
(h) ―managing director‖ 6
(i) ―prescribed‖ 6
(j) ―private company‖ 6
(k) ―registrar‖ 6
, (l) ―scheduled bank‖ 6
(m) ―secured loans or advance‖ 6
(mm) ―securities‖ 6
(n) ―State Bank‖ 6
(o) ―substantial interest‖ 6
6. Ordinance to override memorandum, articles, etc. 7
Part –II
Business of Banking Companies
7. Form of business in which banking companies may engage. 8
8. Use of the word ―Bank‖ or any of its derivatives. 11
9. Prohibition of trading. 11
10. Disposal of non-banking assets. 12
11. Prohibition of employment of managing agents and
restrictions on certain forms of employment. 12
12. Restrictions on removal of records and documents. 14
13. Requirement as to minimum paid-up capital and reserve. 15
14. Regulation of paid-up capital, subscribed capital and
authorised capital and voting rights of shareholders. 16
15. Election of new directors. 19
15A. Appointment of director by State Bank. 19
15B. Restriction on term of Office of directors. 20
15C. Vacation of Office. 20
16. Restriction on commission, brokerage discount, etc.,
on sale of shares. 20
17. Prohibition of charge on un-paid capital. 21
18. Prohibition of floating charge on assets. 21
19. Restrictions as to payment of dividend. 21
20. Prohibition of common directors. 22
,21. Reserve Fund. 23
22. Cash Reserve. 24
23. Restriction on the nature of subsidiary companies. 24
24. Restrictions on loans and advances. 26
25. Power of State Bank to control advances by banking companies. 26
25A. Power of State Bank to collect and furnish credit information. 28
25AA. Preparation of special reports. 29
25B. Recovery of certain dues of banking companies as arrears
of land revenue. 30
26. Power of State Bank to prohibit acceptance of deposits
by banking companies incorporated outside Pakistan. 30
26A. Deposits. 31
27. Licensing of banking companies. 32
27A. Prohibition of advertising for deposits and collection. 34
27B. Disruptive union activities. 35
28. Restrictions on opening of new, and transfer of existing
places of business. 35
29. Maintenance of liquid assets. 36
30. Assets in Pakistan. 38
31. Unclaimed deposits and articles of value. 39
32. Half-yearly returns and power to call for other returns
and information. 44
33. Power to publish information. 44
33A. Fidelity and secrecy. 44
33B. Guidelines by the State Bank. 45
34. Accounts and balance-sheet. 46
35. Audit. 46
36. Submission of returns. 48
, 37. Copies of Balance Sheets, and Accounts to be sent to
Registrar. 48
38. Display of audited balance sheet by banking companies
incorporated outside Pakistan. 49
39. Accounting provisions of this Ordinance not retrospective. 49
40. Inspection. 49
40A. Responsibility of State Bank. 50
41. Power of the State Bank to give directions. 51
41A. Power of the State Bank to remove directors or other
managerial persons from office. 51
41B. Power of the State Bank to supersede Board of Directors
of a banking company. 53
41C. Limitations. 54
41D. Prosecution of directors, Chief Executives or other Officers. 54
42. Further powers and functions of the State Bank. 55
43. Certain provisions of the Ordinance not to apply to
certain banking companies. 59
Part –IIA
Transaction of Banking Business Illegally
By Companies, Etc.
43A. Power to call for certain information, etc. 59
43AA. Special provisions. 60
43B. Power to make declaration. 62
43C. Consequences of a declaration under section 43B. 63
43D. Deposit of cash and preservation of assets, etc. 64
43E. Statement of assets and liabilities to be submitted to State Bank. 65
43F. Consequential provisions for winding up, etc. 66
Part –III
