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Short title.
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1. This Ordinance may be cited as the Bank of Ceylon Ordinance.
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Establishment of bank.
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2. A bank to be called the Bank of Ceylon is hereby established.
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Incorporation of bank.
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3. The bank shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.
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Head office.
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4. The head office of the bank shall be at Colombo in Ceylon.
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Branches and agencies.
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5. The bank may establish and maintain-
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(a) agencies in any part of the world ;
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(b) branches in Ceylon or elsewhere.
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Financial assistance to bank in respect of branches.
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6. The Government shall, in respect of each branch established in Ceylon, as soon as may be after the date of establishment of such branch, either-
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(a) deposit with the bank a sum of one hundred thousand rupees repayable without interest at the end of ten years from the date of deposit; or
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(b) in lieu of making the said deposit make, out of the revenue of Ceylon, a grant of three thousand rupees per annum for a period of ten years commencing from the date of establishment of such branch:
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Provided that no deposit or annual grant shall be made in respect of any branch established, in Ceylon, after the first five branches.
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Constitution of the board.
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7.
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(1) The board shall, subject to the provisions of section 11, consist of not more than five directors.
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(2) So long as the Government holds not less than twenty per centum of the issued capital for the time being of the bank, the Minister[3] shall have the right to nominate two of the directors, hereinafter referred to as the ” nominated directors “
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(3) The first directors shall be nominated by the Governor.
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(4) The nomination of a director shall be made by an instrument in writing, hereinafter called the “instrument of nomination”, signed by or on behalf of the Minister[3] and shall take effect upon the signing of the instrument of nomination.
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(5) The Governor shall specify in the instrument of nomination of the first directors which two of such directors are the nominated directors.
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(6) The other three first directors shall for all purposes be regarded as if they had been elected on the date on which they were nominated and shall be deemed to be elected directors.
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Chairman and deputy chairman of the board.
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8. The directors shall from amongst their number elect-
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(b) if they think necessary, a deputy chairman;
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Qualifications of director.
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9. No person shall be qualified to be a director
unless-
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(a) he is a British subject and has been resident in Ceylon whether continuously or otherwise for a period or periods amounting in all to not less than five years out of the ten years immediately preceding the date of his election or nomination ;
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(b) except in the case of a nominated director he holds shares of the bank of the face value of five thousand rupees or more ;
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(c) being a Member of Parliament [1] he shall resign therefrom within one month of being elected or nominated a director ;
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(d) except in the case of a nominated director, being a whole-time salaried officer of the Government he shall resign from such post within one month of being elected a director.
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Vacation of office of director.
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10.
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(a) accepts or holds any office or place of profit under the bank ;
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(b) becomes bankrupt or is adjudicated insolvent or compounds with his creditors ;
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(c) becomes of unsound mind or is adjudged to be of unsound mind ;
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(d) is absent from meetings of the board for more than three consecutive months without the leave of the board ;
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(e) except in the case of a nominated director ceases to hold the number of shares required to qualify him to the office ;
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(f) being a Member of Parliament[1] at the time of his election or nomination as director fails to resign his seat as a Member of Parliament[1] within one month of such election or nomination ;
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(g) becomes a Member of Parliament;[1]
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(h) except in the case of a nominated director [1] becomes a whole-time salaried officer of the Government;
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(i) by a notice in writing to the bank resigns his office.
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Government director.
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11.
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(1) While the Government owns any shares in the bank, the person for the time being holding the -office of Secretary to the Treasury[1] shall by virtue of his office be a director of the bank (hereinafter referred to as the “Government director”) and shall be a member of the board in addition to the number of directors prescribed in section 7.
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(2) The provisions of this Ordinance relating to-
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(a) the election and nomination of directors ;
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(b) the qualifications and disqualifications of directors ;
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(c) the retirement, rotation and removal of directors ;
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(d) the vacation of office by directors,
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shall not apply to the Government director.
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Rights of Government director.
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12. The Government director shall be entitled to attend-
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(a) all meetings of the directors, and to submit matters for discussion, and to discuss and take part in all or any of the business at such meetings ;
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(b) all meetings of the shareholders and take part 1 in the proceedings thereof.
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Deputy Secretary to the Treasury may be authorized to attend meetings.
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13.
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(1) The Government director may in writing generally or specially authorize, by name or by office, the Deputy Secretary to the Treasury [1] to attend in his place-
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(a) any meeting of the board ;
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(b) any meeting of shareholders.
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(2) The Deputy Secretary to the Treasury [1] shall, at any meeting which he is authorized to attend in place of the Government director, be entitled to all the privileges and rights of the Government director, and may at such meeting exercise such privileges and rights as if he were the Government director.
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Government director not entitled to vote.
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14. The Government director shall not be entitled to vote-
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(a) at any meeting of the directors ; or
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(b) at any meeting of the shareholders, except in the exercise of his right to vote in respect of any shares held by the Government.
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Right of nominated director to attend general meeting.
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15. A nominated director shall be entitled to attend any general meeting and to take part in the proceedings.
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Retirement of directors.
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16. At the ordinary general meeting in 1939, and every year thereafter at the annual general meeting one out of the directors for the time being including the nominated directors shall retire from office.
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Order of retirement of directors.
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17.
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(1) The directors retiring in the years 1939 and 1940 shall be the nominated directors. Thereafter the directors retiring from office shall be those who have
been longest in office since their last election or nomination.
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(2) As between directors elected or nominated on the same day those to retire shall, unless they otherwise agree among themselves, be determined by lot.
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Re-election or renomination of director.
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18. A retiring director shall be eligible for re-election or renomination.
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Termination of office.
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19. A director retiring at a meeting shall retain office until the close or adjournment of the meeting.
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Filling up of vacancy in office of elected director.
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20. Upon the retirement of an elected director the shareholders shall fill up the vacated office by electing a qualified person thereto and in default the retiring director shall be deemed to have been re-elected unless at such meeting with a view to reducing the number of directors it is expressly resolved not to fill up such vacated office.
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Filling up of vacancy in office of nominated director.
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21. Upon the retirement of a nominated director the Minister[3] shall fill up the vacated office by renominating the retiring director or nominating any other person.
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Effect of re-election or
renomination.
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22. On re-election or renomination a retiring director shall at once become a director without any further formality.
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Who may be proposed for election as director.
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23.
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(1) A shareholder shall not propose for election as director any person other than-
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(b) a qualified shareholder recommended by the board; or
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(c) a qualified shareholder whose name has been duly notified in writing to the secretary of the board.
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(2) The name of a shareholder shall not be deemed to have been duly notified for the purpose of paragraph (c) of subsection (1) unless -a written instrument setting out the name of the shareholder who is to be proposed for election, signed by the shareholder giving the notice, together with the written consent of the shareholder whose name is set out in such instrument is delivered to the secretary of the board not less than four nor more than twenty-eight clear days before the date of the meeting at which the election is to take place.
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(3) A shareholder shall not be qualified to give any
notice under this section nor propose any person for election as director at any meeting unless he is entitled be present and to vote at the meeting at which the election takes place.
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Casual vacancies among nominated
directors.
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24.
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(1) If a nominated director dies or vacates his
office’ the Minister[3] shall have power at any time to nominate another person in place of the director so dying or vacating his office.
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(2) The director so nominated shall be subject to retirement at the same time as the director in whose place he has been nominated would have retired had he remained in office.
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Casual vacancies among elected directors.
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25.
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(1) If any elected director dies or vacates his office the board may appoint any other person to be a director in place of the director so dying or vacating his office.
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(2) The director so appointed shall hold office until the next following ordinary meeting, and shall then be eligible for re-election.
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Acting appointment in case
nominated director unable to discharge his duties owing to illness, &c.
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26. If it appears to the Minister[9] that a nominated director is unlikely to be able to discharge the duties of his office for a period of one year by reason of absence from Ceylon, illness, ill health, or any other cause whatsoever, he may appoint another person to act in the place of such director for such period as he may deem fit.
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Acting appointment in case elected director unable to discharge his duties owing to illness, &c.
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27. If it appears to the board that an elected director is unlikely to be able to discharge the duties of his office for a period exceeding one month by reason of absence from Ceylon, illness, ill health, or any other cause whatsoever, the board may appoint a person qualified to be a director to act until the resumption of duties by such director :
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Provided that in no case may the board appoint a Person to act as director for a period exceeding twelve months.
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Additional directors.
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28.
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(1) The board may at any time and from time to time appoint any person to be a director as an addition to the existing board :
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Provided that the total number of directors shall not at any time exceed the maximum number prescribed by this Ordinance ;
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Provided, further, that the exercise by the board of the power conferred by this subsection shall be subject to any right of nominating a director or directors which may for the time being be vested in the Minister3 under any other provision of this Ordinance.
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(2) Any person so appointed shall hold office until the next following ordinary meeting and shall be eligible for re-election.
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Removal of nominated directors.
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29.
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(1) The Minister[3] may from time to time remove either of the nominated directors or both of them, and nominate any other person or persons to fill the vacancy or vacancies caused by such removal. Any director so nominated shall be subject to retirement at the same time as the director in whose place he has been nominated would have retired had he remained in office.
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(2) The removal of a nominated director shall be effected by an instrument in writing signed by or on behalf of the Minister [3] and shall take effect upon the signing of such instrument.
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Removal of elected directors.
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30. The shareholders may by extraordinary resolution remove from office any elected director, and at the same or a subsequent meeting by an ordinary resolution elect any other person in his stead, and such person shall be subject to retirement at the same time as if he had become a director on the day on which the director in whose place he is elected was last elected a director.
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Capital.
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31.
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(1) The capital “of the bank shall be seven million five hundred thousand rupees divided into thirty thousand convertible preference shares of fifty rupees each and one hundred and twenty thousand ordinary shares of fifty rupees each.
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(2) The whole of the preference shares shall be allotted to the Government and the nominal amount thereof together with a premium of one hundred per centum shall be paid by the Government.
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(3) Of the ordinary shares thirty thousand shall be offered, for public subscription, by the Minister on such date as he shall deem fit, and shall be allotted by the Minister in such manner as he may in his discretion
determine.
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Capital of the ordinary shares how paid.
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32. The capital of the ordinary shares offered under section 31 (3) shall be payable-
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(a) as to ten per centum on application ;
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(b) as to a further fifteen per centum on allotment ;
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(c) as to a further twenty-five per centum within three months after the date of allotment; and
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(d) as to the unpaid balance by such further calls as the directors may from time to time deem necessary.
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Permanent reserve fund.
[ 6, 4 of 1944.]
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[ [ 2, 39 of 1949.]
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33.
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(1) The board shall, out of the profits available for payment of dividend and before any dividend is declared, set aside a sum equivalent to twenty per centum of such profits to the credit of a fund called the permanent reserve fund of the bank and shall also, subject to the provisions of section 35, carry to the credit of such permanent reserve fund any premiums received on the issue of shares, until such permanent reserve fund is equivalent to one-half of the paid-up capital of the bank for the time being ; and in the event that at any time thereafter the amount of such Permanent reserve fund is less than half of the paid-up capital of the bank for the time being, the board shall as soon as practicable carry to that fund such further sum or sums out of the profits available for dividend as may be necessary until the amount of the Permanent reserve fund is equivalent to one-half of the paid-up capital of the bank for the time being. The board may from time to time in its discretion carry to the permanent reserve fund out of profits such further sums as it may deem fit, in addition to the sums required by the preceding provisions of this subsection to be carried thereto.
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(2) The permanent reserve fund shall be shown separately in the balance sheet of the bank.
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34.
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(1) In addition to the permanent reserve fund the board shall create a fund called the contingency fund of the bank and shall carry to that fund-
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(a) all premiums received on the issue of shares which are not carried to the permanent reserve fund; and
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(b) such sums out of the profits of the bank as the board think proper.
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(2) The contingency fund may be applied from time to time in such manner as the board shall determine-
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(a) for meeting depreciation and losses ;
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(b) for equalizing dividends;
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(c) for repairing, improving or maintaining any of the property of the bank;
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(d) for any other purposes which the board may think proper.
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(3) The board may divide the contingency fund into such special funds as they think fit, and may consolidate into one fund any special funds or any parts of any special funds into which the contingency fund may have been divided as they think fit, with full power to employ the whole or any part of the assets constituting the contingency fund in the business of the bank without being under any obligation to keep the same separate from the other assets of the bank. The board may also, (subject to the provisions of this Ordinance), without placing the same to reserve, carry over any profits winch they may think it not prudent to divide,
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(4) It shall not be necessary to show the contingency fund separately in the balance sheet of the bank.
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Premiums how dealt with.
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35. The one hundred per centum premium payable by the Government under this Ordinance shall be set aside and carried-
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(a) as to one half thereof to the permanent reserve fund of the bank ;
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(b) as to the other half to the contingency fund of the bank.
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Preference and ordinary shares.
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36.
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(1) For a period of five years from the date of the commencement of business by the bank the preference and ordinary shares shall rank for dividend pari passu according to the capital for the time being paid up thereon respectively:
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Provided that in no event shall a dividend be paid on the preference shares at any time exceeding six per centum per annum.
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(2) After the expiration of such period of five years the preference shares shall carry the right to a fixed non-cumulative preference dividend at the rate of six per centum per annum on the capital for the time being paid up thereon and in a winding up the preference shares shall rank equally as regards return of capital in priority to the ordinary shares but shall not confer the right to any further participation in profits or to any return of capital in excess of the capital paid thereon.
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Conversion of preference shares.
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37.
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(1) At any time after a dividend of not less than six per centum, or dividends amounting in all in any one year to not less than six per centum, has or have been declared on the ordinary shares of the bank any preference shareholder, including any purchaser or Purchasers, but not the Government, shall, upon giving due notice to the bank, be entitled to exchange the preference shares held by him for an equal number of fully paid ordinary shares.
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(2) A notice shall not be deemed to be due notice unless the notice-
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(a) is in writing addressed to the bank at its head office ; and
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(b) is sent either by post or otherwise so as to reach the head office within twelve months from the date on which the preference shareholder giving the notice acquired the preference shares in respect of which the notice is given.
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(3) A notice if sent by post shall be deemed to be
served in the ordinary course of post.
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(4) On the receipt of due notice the bank shall with all convenient speed cancel the preference share or shares in respect of which the notice is given and in lieu thereof issue to the holder thereof an ordinary
share or ordinary shares which shall from the date of issue rank in every respect pari passu with the existing ordinary shares due regard being had to any difference in the amount paid up on any such shares.
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(5) The provisions of subsection (1) shall not apply to any preference shares created under section 39.
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Subdivision of shares.
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38. The shareholders may at any time by special resolution subdivide the capital or any part thereof by the division of the existing shares or any of them into shares of smaller amounts :
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Provided that the proportion between the amount which is paid and the amount if any which is unpaid on each share of reduced amount shall be the same as it was in the case of the existing share or shares from which the share of reduced amount is derived.
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Increase and reduction of capital.
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39.
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(1) The board may from time to time when
authorized by special resolution issue any of the capital of the bank for the time being unissued or increase the capital of the bank by the creation of new shares or reduce the capital in the manner provided for in any law which may be declared to be applicable to the bank:
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Provided that so long as the Government holds not less than twenty per centum of the issued capital for the time being of the bank no such issue, increase or reduction of capital shall take place or be effective, without the prior consent in writing of the Minister.
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(2) Any unissued capital and any new capital raised by the creation of new shares shall be issued by the board on such terms and conditions as shall be previously approved in writing by the Minister. Such terms and conditions may provide for the issue of shares at a premium.
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(3) In the allotment of shares issued or created under this section the board shall observe such general or special written directions as the Minister may give in that behalf.
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Liability of shareholders.
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40. The liability of the shareholders shall be limited.
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Contracts.
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41.
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(1) Contracts on behalf of the bank may be made as follows:-
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(a) a contract which if made between private persons would be by law required to be in writing, may be made on behalf of the bank in writing under the common seal of the bank;
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[ 12, 4 of 1944.]
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[[ 12, 4 of 1944.]
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(b) a contract which if made between private persons is by law required to be in writing, signed by the parties to be charged therewith, may be made on behalf of the bank in writing signed by any person or persons duly authorized thereto as hereinafter provided; and
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(c) a contract which if made between private persons would by law be valid although made by parol only and not reduced into writing, may be made by parol on behalf of the bank by any person or persons duly authorized thereto as hereinafter provided.
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(2) A contract made according to this section shall be effectual in law and shall bind the bank and all other parties thereto and their legal representatives.
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(3) A contract made according to this section may be varied or discharged in the same manner in which it is authorized by this section to be made.
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Bills of exchange and promissory notes.
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42. A bill of exchange or promissory note shall be deemed to have been made, executed, or endorsed on behalf of the promissory bank, if made, executed, or endorsed in the name of, or by or on behalf or on account of the bank by any person or persons duly authorized thereto as hereinafter provided.
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Persons authorized to act on behalf of the bank.
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43. No person other than the directors and persons thereunto expressly authorized by the board and acting within the limits of the authority so conferred on them shall have any authority to make, draw, accept or endorse any promissory note, bill of exchange, cheque or order for the payment of money in the name or on behalf of the bank or to enter into any contract so as to impose thereby any liability on the bank or otherwise to pledge the credit of the bank.
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Execution of deeds abroad.
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44.
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(1) The bank may, by writing under its common seal, empower any person either generally or in respect of any specific matter, as its attorney, to execute deeds on its behalf in any place not situate in Ceylon.
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(2) A deed signed by such an attorney on behalf of the bank and under his signature or seal shall bind the bank and have the same effect as if it were under its common seal.
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Commencement of business.
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45. The bank shall not commence business until-
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(a) thirty thousand of the ordinary shares have been subscribed by and allotted to the public ;
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(b) thirty thousand of the preference shares have been subscribed by and allotted to the Government at a premium of one hundred per centum and paid for in full with the premium ; and
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(c) a certificate signed by the Governor authorizing the bank to commence business has been given.
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Financial aid from Government.
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46. As soon as may be after the certificate authorizing the bank to commence business has been given by the Governor the Government shall deposit with the bank a sum of three hundred and fifty thousand rupees repayable without interest at the end of ten years from the date of such deposit:
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Provided that the Government may in lieu of depositing such sum make, out of the Consolidated Fund,[1] a grant to the bank of ten thousand rupees per annum for a period of ten years from the date of commencement of business by the bank.
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Withdrawal of deposit and substitution of grant.
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47. The Government may at any time during the said period of ten years withdraw the said deposit and make, out of the Consolidated Fund, [1] a grant of ten thousand rupees per annum during the unexpired remainder of the said period of ten years.
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Government grant towards the preliminary expenses.
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48.
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(1) The Government shall also make, out of the revenue of Ceylon, a grant of two hundred and seventy-five thousand rupees towards the preliminary and other costs and expenses in connexion with the formation of the bank.
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(2) Out of the said sum of two hundred and seventy-five thousand rupees such sums as may be required, from time to time, by the Minister towards the preliminary expenses in connexion with the formation of the bank, shall be paid to him.
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(3) Upon the commencement of business by the bank any balance remaining out of the said sum of two hundred and seventy-five thousand rupees shall be paid to the bank and such balance shall, after meeting all further expenses and costs in connexion with the formation of the bank, remain the property of the bank and be carried to the credit of the contingency fund.
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Powers of
Minister until commencement of business by the bank.
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49. The Minister may, upon this Ordinance being brought into operation and until the commencement of business by the bank-
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(a) invite and receive applications for shares ;
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(c) do or perform any of the acts which the board is by this Ordinance empowered to do or perform ; and
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(d) do all other acts whatsoever as he may deem necessary for the formation of the bank.
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Acts commenced
by the Minister may be continued by the board.
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50.
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(1) Any act done or performed by the Minister by virtue of section 49 shall, for all purposes, have the same effect as if such act had been done or performed by the board.
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(2) The board may continue any action or thing commenced by the Minister, remaining unfinished or incomplete at the date of commencement of business by the bank, as if such action or thing had been commenced by the board.
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Sale of Government shares.
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51. The Secretary to the Treasury[1] on being authorized in that behalf by the Minister may from time to time sell shares held by the Government at not less than par:
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[ 3, 39 of 1949.]
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[ [ 15, 4 of 1944.]
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Provided that the Minister shall not authorize the sale of any shares held by Government without the consent of the House of Representatives,[1] previously obtained.
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Person who may execute documents and make payments on behalf of Government.
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52. The Secretary to the Treasury [1] is hereby authorized to sign and execute all documents which are required to be executed by the Government as share-holder of the bank or otherwise.
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Funds from which
moneys payable under this Ordinance are to be paid.
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53. All sums of money whatsoever required to be paid, granted, or deposited by the Government under this Ordinance shall, where it is not expressly provided by this Ordinance that such sums should be paid out of the Consolidated Fund,[1] be paid out of such, fund or funds of Ceylon as the Minister shall determine.
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Payment of moneys authorized by this Ordinance to be made.
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54.
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(1) The Secretary to the Treasury1 is hereby authorized and empowered to make or cause to be made all payments, grants, and deposits required by this Ordinance to be made to or in the bank-
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(a) out of the Consolidated Fund [1] where it is so provided by this Ordinance ; and
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(b) in any other case out of such funds as may be
determined by the Minister under section 53.
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(2) In any case in which the Government is under this Ordinance entitled to withdraw any deposit and substitute therefor a grant, the Secretary to the Treasury[1] may withdraw any such deposit and substitute therefor the prescribed grant.
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Payments and deposits how shown in Ceylon’s statement of assets and liabilities.
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55. All payments and deposits out of such funds as
may be determined by the Minister under section 53 shall be shown in every statement of assets and liabilities of Ceylon in such manner as he shall determine.
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Appointment of officers.
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56.
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(1) The board shall have power to appoint the staff of the bank including the subordinate staff:
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Provided that the appointment of the general manager shall not be made without the previous approval in writing of the Minister;
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Provided, further, that the Minister’s approval shall not be necessary for the appointment of an officer of the bank to act for the general manager during his absence if such appointment is for a period not exceeding four months.
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Officers to furnish security.
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57.
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(1) Every officer and member of the subordinate staff of the bank shall give security to the satisfaction of the board for the due and faithful performance of his duties.
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(2) The expression “subordinate staff” for the purpose of section 56 and of subsection (1) shall include only such officers as are by the board deemed to be members of the subordinate staff.
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Dismissal of general manager.
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58. No general manager shall be dismissed except on a resolution of the board passed by a majority of not less than three directors.
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No liability for damage or loss caused otherwise than by-misconduct or wilful default.
[ 18, 4 of 1944.]
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[ [ 5, 19 of 1952.]
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59. No director or officer of the bank shall be liable for any damage or loss suffered by the bank unless such damage or loss was caused by his misconduct or willful default.
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Reimbursement for incurred on behalf of the bank.
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60. Every director, manager, secretary or other officer of the bank shall be indemnified by the bank from all losses and expenses incurred by him in or about the discharge of his duties, other than such losses and expenses as the board may deem to have been occasioned by his misconduct or willful default.
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61. Every director, manager, auditor. officer, servant, agent, accountant, or other person employed in the business of the bank, shall, before entering upon his duties sign a declaration pledging himself to observe strict secrecy respecting all transactions of the bank, its customers, and the state of accounts with any person and all matters relating thereto and shall by such declaration pledge himself not to reveal any other matters which may come to his knowledge in the discharge of his duties except-
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(a) when required to do so-
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(ii) by any meeting of the shareholders, or
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(iii) by a court of law, or
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(iv) by the person to whom such matters relate ;
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(b) in the performance of his duties; and
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(c) in order to comply with any of the provisions of this Ordinance or any other law.
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Declarations of secrecy made before 24th March, 1952.
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Every declaration made under this section before the 24th day of March, 1952, shall, for all purposes, have effect and be deemed to have had effect as though the reference in such declaration to ” accounts with individuals ” were a reference to ” accounts with any person “.
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Right to refuse to answer questions.
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62. Every director, auditor, manager, secretary, or other officer of the bank shall, except when required to do so by a court or by any law, decline to answer any question concerning the business of the bank which may be put to him on any occasion whatsoever, if he considers that the answer to such question would disclose or tend to disclose the secrets of the bank or the business or affairs of any customer of the bank.
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Receipts when valid.
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63. A receipt signed by two directors or by any person expressly authorized by the board to give receipts shall be an effectual discharge for moneys paid to the bank.
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Inspection of documents.
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64. No shareholder, unless he is a director, auditor, or officer, clerk, accountant, or other person whose duty requires him to do so, shall be entitled to inspect any of the books, accounts, documents, or writings of the bank, except such as are produced for the purpose of inspection at a general meeting.
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Balance sheet, statement of accounts and reports of directors to be furnished to general meeting.
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65.
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(1) At every ordinary meeting the directors shall lay before the meeting a balance sheet or statement of the accounts of the bank made up to a date not more than six months before the meeting from the time when the last preceding statement was made, or in the case of the first balance sheet or statement from the date of commencement of business by the bank.
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(2) Every such balance sheet or statement shall be accompanied by a report of the directors as to the state and condition of the bank and as to the amount if any which they recommend to be paid out of the profits by way of dividend or bonus to the shareholders and the amount if any which they recommend to be retained for the reserve fund.
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66.
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(1) The accounts of the bank shall be audited at such intervals as the board may decide, not being more than twelve months, by two qualified auditors who shall be elected by the bank in general meeting and shall hold office for one year :
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Provided that the two auditors so elected shall be practising independently of each other and shall not be members of the same firm of auditors ;
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Provided also that-
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(i) where no auditor is so elected to audit the accounts of any year or where neither of the auditors so elected is able to audit such accounts, the accounts shall be audited by the Auditor-General; and
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(ii) where only one auditor is so elected to audit the accounts of any year or where only one of the auditors so elected is able to audit such accounts, the accounts shall be audited by that auditor and by the Auditor-General;
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Provided, further, that while and whenever the Government holds any shares of the bank or any money or funds of the Government are deposited with the bank the Minister[1] may from time to time appoint such other auditor as he thinks fit to examine and report to him on the accounts and affairs of the bank and at the cost and expense of the bank.
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(2) No qualified auditor (other than an auditor retiring from office) shall be proposed for election at any meeting, unless notice of intention to propose that auditor has been given not less than five days and not more than one month before that meeting.
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(3) A director or any officer of the bank shall not be eligible for the office of auditor.
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(4) In this section, ” qualified auditor” means a chartered accountant or a member of the Society of Incorporated Accountants and Auditors, and includes a firm of qualified auditors.
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Auditors’ report.
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67.
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(1) The auditors shall examine the accounts of the bank and ascertain the correctness of the balance sheet and report to the shareholders-
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(a) whether or not they have obtained all the information and explanations they have required ; and
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(b) whether in their opinion the balance sheet
referred to in the report is properly drawn up so as to exhibit a true and correct view of the bank’s affairs according to the best of their information and the explanations given to them and as shown by the books of the bank.
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(2) For the purpose of ascertaining the correctness of the balance sheet the auditors may, with the sanction of the board and the Minister, accept, in respect of any branch of the bank, any copies or abstracts from the books and accounts of such branch which have been transmitted, to the head office of the bank and which have been certified to be correct by an officer of the bank authorized in that behalf by the board.
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Copy of accounts to be sent.
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68. At least seven days before every ordinary meeting a printed copy of the balance sheet so audited and the auditors’ report as aforesaid shall be sent by the board to every shareholder at his registered address.
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Balance sheet conclusive after approval.
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69.
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(1) Every balance sheet when audited shall after adoption by a general meeting be conclusive except as regards any error discovered therein within three months next after the adoption thereof.
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(2) Whenever any such error is discovered within
that period the balance sheet shall be forthwith corrected by the auditors and shall thenceforth be conclusive.
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Application of the Provision of the companies Ordinance.
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70.
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(1) The provisions of the Companies Ordinance! or any other enactment regulating the incorporation of companies shall not apply to the bank.
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(2) Notwithstanding the provisions of subsection (1) the Minister may,[1] whenever it shall seem to him expedient to do so, by Order declare that any one or more or all the provisions of the said Ordinance or any other enactment relating to companies for the time being in force shall apply to the bank and such provision or provisions shall thereupon have effect as if such provision or provisions are part of this Ordinance.
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Business which the bank transact.
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71. Subject to the provisions of this Ordinance the business which the bank is authorized to carry on and transact shall be the several kinds of business specified in Part I of the First Schedule subject to the limitations mentioned in Part II thereof.
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By-taws of the bank.
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72. The provisions contained in the Second Schedule shall be the by-laws of the bank in regard to the matters to which they relate.
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Alteration of Second Schedule.
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73.
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(1) The shareholders may by special resolution
alter the provisions of the Second Schedule :
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Provided that no such resolution shall take effect unless and until such resolution is approved by the Minister.[1]
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(2) All resolutions made under subsection (1) shall be published in the Gazette.
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Applications to the Minister.
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74. All applications to the Minister[3] by the board for his approval or sanction for any matter or thing for which the Minister’s approval or sanction is by this Ordinance required, shall be made in writing signed by the officer or person authorized in that behalf by the board.
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All disputes to be referred to arbitration.
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75.
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(1) Every difference between the bank on the one hand and any of the shareholders, their heirs, executors, or administrators on the other hand, or between any of the shareholders, their heirs, executors, or administrators in any way relating to any of the subject-matters of these presents or any claim or demand arising out of or relating to the same shall be referred to arbitration before any proceedings are taken in a court of law.
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(2) Each of the parties concerned shall select an arbitrator, and such arbitrators shall before entering on the arbitration select an umpire. The decision or decisions of the arbitrators or of the umpire, as the case may be, shall be final.
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Interpretation.
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76. In this Ordinance (including the Schedules), unless the context otherwise requires-
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“bank” means the Bank of Ceylon established by this Ordinance ;
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” board” means a duly convened and constituted meeting of the directors of the bank for the
time being ;
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” capital” means the capital for the time being of the bank ;
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” Deputy Secretary to the Treasury” means the person for the time being performing the functions of the Deputy Secretary to the Treasury of the Government [1]
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“director” means a person holding the office of a director of the bank ;
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“elected director” means a person elected to the office of director by the shareholders and includes the first directors other than the nominated directors ;
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“extraordinary resolution” means a resolution passed by a majority of not less than three-fourths of the shareholders entitled to vote, and voting in person or by proxy, at a general meeting of which notice specifying the intention to propose the resolution as an extraordinary resolution has been duly given ;
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” general meeting” includes ordinary meeting and extraordinary meeting ;
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” Government” means the Government of Ceylon ;
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” head office ” means the head office of the bank ;
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” officer ” means an employee of the bank and shall not be construed to include a director or an auditor of the bank ;
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” ordinary meeting ” means an ordinary meeting of the shareholders duly called and constituted ;
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” Secretary to the Treasury ” means the person for the time being performing the functions of the Secretary to the Treasury of the Government;[1]
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” special resolution” means a resolution passed by three-fourths in value of the shareholders present in person or by proxy at any meeting of the bank of which notice specifying the intention to propose such resolution has been duly given and confirmed by a majority in value of the shareholders present in person or by proxy at a subsequent meeting of which notice specifying the intention to propose such confirmation has been duly given :
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Provided that the subsequent meeting shall be held at an interval of not less than fourteen days nor more than two months from the date of the meeting at which the resolution was first passed;
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first passed; ” shareholder” means any duly registered holder from time to time of one or more shares and includes the Government director.
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Schedules
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