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| NATIONAL SAVINGS BANK |
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AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF THE NATIONAL SAVINGS BANK WITH THE OBJECT OF CARRYING ON, AMONGST OTHER ACTIVITIES, THE BUSINESS PRESENTLY CARRIED ON UNDER THE CEYLON SAVINGS BANK ORDINANCE, THE CEYLON POST OFFICE SAVINGS BANK ORDINANCE AND THE SAVINGS CERTIFICATES ORDINANCE, FOR THE REPEAL OF THOSE ORDINANCES, AND TO MAKE PROVISION FOR MATTERS CONNECTED THEREWITH OR INCIDENTAL THERETO.
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| Act Nos, |
| 30 of 1971 |
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| 8 of 1982 |
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| 33 of 1987 |
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| 28 of 1995 |
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| 22 of 1999 |
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[29th September
, 1971 ]
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Short title.
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1. This Act may be cited as the National Savings Bank Act.
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| ESTABLISHMENT AND CONTROL OF THE NATIONAL SAVINGS BANK |
Establishment of the National Savings Bank.
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2.
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(1) There shall be established a bank called the National Savings Bank (hereinafter referred to as the “Bank”)
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(2) The Bank shall, by the name assigned to it by subsection (1), be a body corporate and shall have perpetual succession and a common seal and may sue and be sued in such name.
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2A. The object of the Bank shall be the promotion of savings among the people of Sri Lanka, particularly among those with limited means, and the profitable investment of savings so mobilized.
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3.
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(1) The common seal of the Bank shall be in the custody of the Board of Directors of the Bank (hereinafter referred to as ” the Board “).
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(2) The seal of the Bank may be altered in such manner as may be determined by the Bank.
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(3) Subject to the provisions of subsection (4) the Seal of the Bank shall not be affixed to any instrument or document except in the presence of two members of the Board both of whom shall sign the instrument or document in token of their presence.
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(4) Where due to sickness, temporary absence from Sri Lanka or there being vacancies in the membership of the Board, affixing of the seal under subsection (3) cannot be done in the presence of two members, the seal may be affixed to any instrument or document in the presence of one member and the General-Manager of the Bank.
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Principal place of business and branches and agencies of the Bank.
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4.
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(1) The Bank shall have its principal place of business in Colombo and may have such branches, and may appoint such agencies and agents as may be necessary for the transaction of business of the Bank and may also appoint agents and establish representative offices outside Sri Lanka for purpose of mobilisation of deposits.
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(2) For the purposes of subsection (1) the Bank may appoint as an agent, subject to such terms and conditions as may be prescribed, any person, commercial bank or body corporate.
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5.
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(1) The authorized capital of the Bank shall be ten billion rupees divided into one billion shares of ten rupees each.
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(2) The issued capital of the Bank shall be as determined from time to time by the Minister in consultation with the Board, by Order published in the Gazette, so however that such issued capital shall not be an amount less than one billion and two hundred million rupees divided into one hundred and twenty million shares of ten rupees each.
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(3) All shares of the Bank shall be issued in the name of the Secretary to the Treasury in his official capacity and who shall not dispose of those shares in any manner whatsoever.
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Authorized activities and functions of the Bank.
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6.
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(1) subject to the provisions of this Act and any other law including regulations made or directions issued thereunder, the Bank is authorized to undertake any or all of the following functions or activities:-
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(a) the promotion and mobilization of savings in Sri Lanka and any activity incidental thereto, including the opening of deposit accounts, savings certificate or any other instrument or product that will enable the Bank to mobilise savings;
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(b) the purchasing of, and trading in any securities, debentures, treasury bills or any such financial instruments issued or guaranteed by the Government ;
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(c) lending in the inter bank call money market, subject to such overall ceiling as may be approved from time to time by the Monetary Board ;
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(d) undertaking wholesale lending to licensed commercial banks and other financial institutions for on-lending to their clients ;
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(e) undertaking retail lending to its own depositors against the security of their deposits or any other security or guarantee as determined by the Board;
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(f) providing housing loans or other loans for non commercial purposes on security provided by the mortgages of immovable property;
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(g) participating in the syndication of loans with other banks and financial institutions;
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(h) purchasing, taking on lease, exchange, hiring or otherwise acquiring, any immovable or movable property or any lights in such property or any rights in such property and leasing, mortgaging, selling or otherwise disposing of such property;
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(i) constructing buildings on land purchased, leased or otherwise acquired by the Bank;
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(j) trading in financial instruments issued or guaranteed by financial institutions and quoted companies approved by the Board;
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(k) providing re-finance facilities to licensed commercial banks and licensed specialised banks, for the purpose of medium and long term project lending;
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(l) issuing letters of guarantee against deposits;
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(m) borrowing monies from local and international credit institutions or agencies;
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(n) conducting lotteries and prize competitions;
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(o) investing in equity capita; of any licensed commercial bank, licensed specialized bank, a subsidiary of any licensed commercial bank or licensed specialized bank or in any public company listed or seeking listing in a licensed stock exchange;
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(p) opening of rupee accounts for non residents;
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(q) collection and conversion of foreign currency from depositors;
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(r) providing safe custody and safe deposit locker facilities to customers;
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(s) undertaking pawn broking business subject to such conditions as may be determined by the Monetary Board:
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(t) providing facilities for money transfers;
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(u) establishing subsidiary companies with the written approval of the Monetary Board;
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(v) undertaking trust and estate administration;
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(w) carrying on suit other activities as may he incidental or conductive to the functions and activities referred to above.
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(2) Investment by the Bank in financial instruments referred to in paragraph (b) of subsection (1) of this section shall constitute not less than sixty per centum of the money deposited in savings and deposit accounts in the Bank unless otherwise determined by the Monetary Board.
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Management of the Bank vested in the Board.
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7.
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(1) The general supervision, control and administration of the affairs and the business of the Bank shall be vested in the Board.
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(2) The Board may exercise all or any of the powers of the Bank.
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Constitution at the Board.
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8.
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(1) The Board shall consist of seven directors of whom-
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(a) five shall be appointed by the Minister(hereinafter referred to as the ” appointed directors “) from among persons whom he considers to be capable of directing the affairs of the Bank efficiently and effectively in such a manner as will enable the Bank to achieve its object, and each of whom-
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(i) has had experience at a senior managerial level, in banking, commerce, business or allied fields or has had administrative experience; or
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(ii) has professional qualifications in banking, economics, commerce, law, accountancy, business management or other discipline; and
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(b) one shall be the Secretary to the Treasury or his nominee; and
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(c) one shall be the Postmaster-General or his nominee.
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(2) An appointed director shall unless he vacates office earlier by death, resignations or removal hold office for a term of three years.
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(3) The Minister may, for cause assigned, remove an appointed director from office where he is satisfied that the continuance of that director in office is detrimental to the interest of the Bank.
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(4) An appointed director may at any time resign his office by a letter addressed to the Minister and such resignation shall take effect upon it being accepted by the Minister in writing.
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(5) An appointed director vacating office by resignation or effluxion of time shall be eligible for reappointment.
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(6) If an appointed director vacates his office otherwise than by expiration of his term of office, a director may be appointed in his place by the Minister, and such second- mentioned director shall hold office during the unexpired part of the term of office of the director so vacating office.
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(7) If an appointed director is temporarily unable to discharge the duties of his office on account of ill health or absence from Sri Lanka, the Minister, may appoint another eligible person to act for him.
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Disqualifications for being appointed a director of the Board.
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9. A person shall be disqualified from being appointed or continuing as a director of the Board under paragraph (a) of subsection (1) of section 8, if he-
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(a) is a Member of Parliament or of any Provincial Council or any local authority ; or
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(b) is, under any law in force in Sri lanka found or declared to be of unsound-mind ; or
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(c) is a person who, having been declared insolvent or bankrupt under any law in force in Sri Lanka or in any other country, is an undischarged insolvent or bankrupt ; or
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(d) is convicted of an offence involving moral turpitude and punishable with a term of imprisonment.
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Remuneration of directors.
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10. The directors may be paid remuneration out of the funds of the Bank at such rates as the Minister may determine.
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11.
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(1) The Minister shall nominate one of the directors of the Board to be its Chairman.
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(2) The Chairman if present shall preside at meetings of the Board. If a Chairman has not been appointed or is not present at the time fixed for holding of a meeting of the Board, the directors present shall choose one of their number to preside at such meeting.
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(3) Where the Minister is satisfied that the continuance of the Chairman in offices detrimental to the interests of the Bank, he may remove the Chairman from office,
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(4) The Chairman may at any time resign from the office of the Chairman by letter addressed to the Minister. Such resignation shall take effect upon it being accepted by the Minister.
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(5) Subject to the provisions of subsections (3) and (4), the term of office of the Chairman shall be his period of membership of the Board.
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Quorum for any meeting of the Board.
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12. The quorum for any meeting of the Board shall be four.
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13.
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(1) A meeting of the Board shall be held as often as the Chairman may deem necessary: Provided that a meeting of the Board shall be held once at least in every six weeks.
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(2) The Chairman shall, upon a written requisition from any two directors, call a special meeting of the Board. No such special meeting shall be held unless at least four days’ notice specifying the time of the meeting and the purpose for which it is to be held has been given by notice in writing to every director.
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(3) Subject to the provisions of this Act, the procedure to be followed at meetings of the Board shall be as determined by rules made under this Act or, in the absence of such rules, as may be determined by the Board.
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(4) The General Manager of the Bank appointed under section 26 of this Act, shall have the right to be present at, and participate in, meetings of the Board, except at any such meeting where the work or the general conduct of the General Manager is being discussed.
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Disclosure of interest by a director.
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14. A director who, or whose spouse or dependent child, is directly or indirectly interested in any business transacted or proposed to be transacted by the Board shall disclose the nature of such interest at the meeting of the Board where such business is discussed. The disclosure shall be recorded in the minutes of the Board, and such director shall not take part in any deliberation or decision of the Board with respect to that business, and shall withdraw from such meeting while such deliberation is in progress or decision is being made.
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Minutes of meeting of the Board.
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15.
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(1) The Board shall cause minutes to be made of the proceedings of every meeting of the Board in books kept for that purpose.
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(2) The minutes of the proceedings of any meeting of the Board, if signed by the member presiding at that meeting or at the next succeeding meeting, shall be prima facie evidence of the proceedings of the meeting to which the minutes relate.
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Determination of question at meetings of the Board.
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16.
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(1) Any question which arises at any meeting of the Board shall be decided by a majority of the votes of the members present, and in the case of an equality of votes, the member presiding at the meeting shall have a second or casting vote.
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(2) No act or proceeding of the Board shall be invalid by reason only of the existence of any vacancy among the directors or any defect in the appointment of a director.
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Granting of financial accommodation.
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17.
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(1) The Bank shall grant financial accommodation under this Act on the basis of normal commercial criteria applicable to loans, and shall endeavour to obtain a return, on such accommodation at the current market rate of interest chargeable for loans.
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(2) Notwithstanding the provisions of subsection (1) of this section, the Minister may, having regard to the national economic interest of Sri Lanka and where he is of opinion that the grant of the financial accommodation is necessary to support any sector or sub-sector of the economy and having regard to any special circumstances relating to the application for the financial accommodation, direct the Board in writing to grant any financial accommodation-
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(a) which in the opinion of the Board does not conform to normal prudent banking criteria; or
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(b) at a rate of interest lower than that which the Bank would normally have charged for such accommodation.
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(3) where any direction is given by the Minister under-
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(a) paragraph (a) of subsection (2), the Secretary to the Treasury shall prior to the grant of such accommodation, provide an on behalf of the Government of Sri Lanka, on terms acceptable to the Board for the repayment of such accommodation and the interest payable on it when such repayment or interest become due; or
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(b) under paragraph (b) of subsection (2) the Secretary to the Treasury shall pay as a subsidy to the Bank, the difference between the interest charged and the interest which the Bank would normally have charged for such an accommodation and such subsidy shall be paid annually or at such other intervals as may be agreed upon between the Secretary to the Treasury and the Board; or
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(c) under paragraphs (a) and (b) of subsection (2), the Secretary to the Treasury shall, prior to the grant of such accommodation, provide a guarantee as is referred to in paragraph (a) of this subsection, and also pay the subsidy as is referred to in paragraph (b) of this subsection.
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(4) Where a guarantee has been provided under subsection (3) the Minister shall, at the earliest convenient opportunity, lay a statement relating to the guarantee before Parliament.
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(5) Any sum required for the fulfillment of a guarantee provided under subsection (3) of this section shall be paid out of the Consolidated Fund, within one hundred and eighty days of demand bring made therefor to the Secretary to the Treasury by the Bank. “.
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Information to be furnished to the Minister.
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17A. The Minister may from time to time direct in writing the Board to furnish to him such information with respect to the business of the Bank as he may require and the Board shall carry out every such direction.’.
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Guarantee by the Government of Sri Lanka.
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18. The repayment of the moneys deposited in the Bank and of the interest thereon and the payment due on the surrender of a savings certificate shall be guaranteed by the Government of Sri Lanka and is hereby constituted a charge upon the Consolidated Fund, and if the assets of the Bank are insufficient to pay a lawful claim made by any depositor or any purchaser or holder as the case may be, of a savings certificate, the deficiency shall be met accordingly.
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19. All expenses incurred by the Bank in carrying out its functions and activities shall be met from the moneys of the Bank.
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Establishment of reserves.
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20.
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(1) The Bank shall establish-
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(a) a general reserve; and
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(b) any other special reserves for such purposes as the Board thinks fit.” ; and
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(2) After making transfer to the reserves of the Bank out of the net-profits of the Bank for each financial year, such amount of such profits as shall be determined by the Board in consultation with the Minister shall be transferred by the Bank to the Consolidated Fund.
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Person who may execute documents for and on behalf of the Government.
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24. The Secretary to the Treasury is hereby authorized to sign and execute for and on behalf of the Government all documents which are required to be executed by the Government.
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Receipts when valid.
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25. 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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| APPOINTMENT OF STAFF AND AUDIT OF ACCOUNTS |
Appointment of the General Manager.
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26.
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(1) The Board shall appoint a fit and proper person to be the Manager of the Bank who shall be the Chief Executive Officer of the Bank.
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(2) The Board may appoint such other officers and servants as it may consider secretary for the conduct of the business of the Bank.
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(3) The salaries, allowances and other benefits and conditions of service of the General Manager and officers and servants of the Bank, shall be determined by the Board.
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Delegation of powers to the General Manager and any other officer.
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26A.
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(1) The Board may, from time to lime by resolution made in that behalf delegate to the General Manager or to any other officer of the Bank any of its functions or activities, subject to such terms and conditions as may be specified in such resolution and the Board may revoke or withdraw any such delegation.
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(2) Notwithstanding any delegation made under subsection (1) to the General Manager of to any other officer of the Bank, the Board shall have the right to discharge or perform any function or activity so delegated.
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Appointment of advisers and consultants.
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27. The Board may from time to time appoint as advisers and consultants to the Bank persons possessing skills or professional qualifications such as accountants, lawyers, auditors and lawyers required for the conduct of its business and discharge of its functions under this Act, and the advisers and consultants so appointed shall be remunerated in such manner and at such rates as the Board may determine.
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No liability for damage or loss caused otherwise than by misconduct or wilful default.
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30. No director, officer or servant of the Bank or an adviser or consultant appointed under section 27 of this Act, shall be liable for any loss or damage suffered by the Bank unless such loss or damage was caused by his misconduct or wilful default.
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Officers to furnish security.
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31. Every officer or servant of the Bank, other than a member of any class of officers or servants exempted by the Board, shall give security to the satisfaction of the Board, for the due and faithful performance of his duties.
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Reimbursement for expenses incurred on behalf of the Bank.
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32. Every director, officer and servant of the Bank and every adviser or consultant appointed under section 27 of this Act 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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33. Every director, officer and servant of the Bank, and every adviser or consultant appointed under section 27 of this Act who is required to do so by the Board, 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 matters which may come to his knowledge in the discharge of his duties except”
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(a) when required so to do”
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(ii) by a court of law, or
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(iii) 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 Act or any other law:
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Provided that the signing of such a declaration by a person so employed shall not be obligatory if such person is also employed in the business of a post office, but such person shall be deemed to have signed such a declaration.
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Right to refuse to answer questions.
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34. Every director, officer or servant of the Bank and every adviser or consultant appointed under section 27 of this Act 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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Funds and scheme for benefit of officers and servants of the Bank and dependants.
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35.
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(1) The Board may establish and regulate a pension scheme or provident fund for the payment of pensions, gratuities or retiring allowances to officers and servants of the Bank and a widows’ and orphans’ pension fund or scheme for providing pensions to the widows and orphans of deceased officers and servants of the Bank.
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(1A) The Pension Fund shall be established as a separate Fund and be separated from the balance sheet.
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(1B) An actuarial valuation of the Pension Fund shall be made once in every two years in order to ensure that there are sufficient moneys available in the Fund to meet its liabilities. ” ; and
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(2) The Board may establish and regulate other funds or schemes, including housing schemes, and the grant of loans on the security of movable or immovable property in connection therewith, for the benefit of officers and servants of the Bank and their dependants.
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(3) The Board may require contributions to be made, to any scheme or fund established and regulated under this section, by officers and servants who or whose dependants are benefited thereby, and may deduct such contributions from their salaries and wages and may make contributions to any such scheme or fund from the revenues of the Bank.
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36.
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(1) The Board shall cause the accounts of the Bank to be kept in such form and manner as may be determined by the Board.
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(2) The Bank shall, in respect of such proportion of its funds as the Board may determine, open current accounts in such banks as such Board may approve.
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(3) The financial year of the Bank shall be the year commencing on the first day of January.
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Audit of account of the Bank.
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37.
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(1) The accounts of the Bank for each financial year shall be submitted to the Auditor-General for audit within three months of the close of that financial year.
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(2) The provisions of the Article 154 of the Constitution relating to the audit of the accounts of public corporations shall apply to the audit of the accounts of the Bank.
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Documents to be transmitted to the Minister to be laid before Parliament.
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38.
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(1) The Board shall, on receipt of the Auditor-General’s report in respect of any year, cause a copy of each of the following documents relating to that year to be transmitted to the Minister:”
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(a) Auditor-Generals report;
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(c) profit and loss statement;
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(d) report of the Chairman of the Bank giving an account of the work of the Bank; and
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(e) such other financial statements or statistical data as may be decided on by the Minister.
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(2) The Minister shall lay copies of the documents transmitted to him under subsection (1) before Parliament.
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| BUSINESS OF THE BANK GENERAL |
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41. Interest, shall be paid by the Bank at rates to be determined by the Board, on money’s deposited with it, including money’s transferred to the Unclaimed Deposits Reserve, for the period during which the money was lying’ in such Unclaimed Deposits Reserve.
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Payments other an interest.
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42. The Board may make payments, other than interest, on such classes of accounts as if may specify, and at such rates as it may determine.”.
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Accounts by or on behalf of minors.
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43.
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(1) The Bank may open accounts in the name of minors, or of guardians on behalf of minors.
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(2) A minor who has completed not less than seven years of age may operate upon an account opened in his name in like manner as if he had attained majority :
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Provided that an application for the withdrawal of money by a minor who has not completed sixteen years of age shall be made at least seven days prior to such withdrawal.
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(3) The whole or any part of the money standing to the credit of a minor under the age of seven years may be paid to any person who produces satisfactory proof to show that the minor is in his care.
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(4) A guardian may operate upon an account in his name on behalf of a minor who has not completed sixteen years of age and a receipt signed by such guardian shall be a sufficient discharge for any payment made to him.
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Nominations by persons having a deposit or savings account.
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44.
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(1) Any person over sixteen years of age who has a deposit or savings account may nominate a person, (hereinafter called a ” nominee “), to whom the moneys lying to the credit of such first-mentioned person (hereinafter called ” nominator “) shall be paid upon his death and, if his death should occur while the account exists, the moneys shall be so paid subject to the provisions of this Act.
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(2) A nomination made under subsection (1) shall have effect upon the death of the nominator notwithstanding anything in his last will to the contrary.
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(3) Any nomination made under subsection (1) shall be deemed to be revoked by the death of the nominee in the lifetime of the nominator or by written notice of revocation signed by the nominator in the presence of a witness (who shall attest the signature of the nominator) or by any subsequent nomination made by the nominator.
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(4) The moneys lying in his deposit or savings account to the credit of the person who has made a nomination under subsection (1) shall, in the event of his death, be deemed not to form part of the estate or property of that person for the purpose of probate or administration proceedings under the Civil Procedure Code, and the transfer of such property shall not be an offence under section 547 of that Code.
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(5) No payment shall be made by the Bank to any nominee unless the nominee makes an application supported by evidence acceptable to the Bank, in respect of his identity.
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(6) A payment made to a nominee of a deceased nominator shall be a complete discharge of the obligations of the Bank in respect of the moneys lying to the credit of such nominator.
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Settlement of disputes.
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45. Where any dispute arises between the Bank and any person who has a deposit or savings account in the Bank or any heir, executor, administrator or creditor of such person, or assignee of such person who becomes insolvent, or any person claiming to be heir, executor, administrator, creditor or assignee or to be entitled to any money lying in the Bank to the credit of such first-mentioned person, then, in every such case, the matter in dispute shall be referred to an arbitrator mutually agreed upon by the Bank and the other party to the dispute, or, if they are unable to agree upon such an arbitrator, to two arbitrators one of whom shall be nominated by the Bank and the other by such other party, together, if the arbitrators are unable to resolve the dispute, with a third arbitrator agreed upon by such arbitrators, and the award, order or determination made by the majority of the arbitrators shall be final and conclusive and binding on the Bank and the other party to the dispute.
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Payment in case of incapacity.
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46. Where a person who has a deposit or savings account in the Bank is alleged to be of unsound mind or otherwise incapable of managing his affairs, and the Bank is satisfied as to his incapacity and as to the urgency of his need, the Bank may with the approval of the Board pay the money lying to his credit to such other person as the Board thinks proper, and a receipt signed by such other person shall be a sufficient discharge for any payment made to him.
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47.
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(1) Where an account has lain dormant, that is to say-
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(a) in the case of a savings account, the saving book has not been, presented to the Bank either for withdrawal from or deposit into the account or, for the insertion of interest, for a period of ten years by a person who commenced the account on or after reaching the age of sixteen years or for a period of ten years on or after reaching the age of sixteen years in the case of a person who commenced his account before reaching the age of sixteen years; or
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(b) in the ease of a deposit account, instructions for automatic renewal on maturity have not been issued to the Bank and the deposit receipt has not been presented for renewal for a period of ten years by a person who commenced the account on or after reaching the age of sixteen years, or for a period of ten years on or after reaching the age of sixteen years in the case of a person who commenced the account before reaching the age of sixteen years,
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the money lying to the credit of such accounts shall be transferred to a special reserve, to be called the ‘ ” unclaimed Deposits Reserve.”.
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(2) The account from which moneys were transferred to the unclaimed Deposits Reserve shall, from the date of such transfer be no longer considered as a liability of the Bank.
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(3) The whole or such part of the moneys lying to the credit of the unclaimed Deposits Reserve, as may be determine by tile Minister, may be capitalized and shares to the value of the money capitalized, may be issued by the Bank to the Secretary to the Treasury.
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(4) Where after the transfer of any money to the unclaimed Deposits Reserve, any claim is made to the Bank in respect of moneys which were lying to the credit of an account referred to in subsection (1), the Bank shall after an examination of such claim, pay to the claimant an amount equivalent to the amount which was in the account together with interest calculated in accordance with rates as determined by the Board under section 41 and shall thereafter make an application to the Secretary to the Treasury for reimbursement of the amount paid and the Secretary to the Treasury shall as soon as possible after receipt of the application, pay out of the Consolidated Fund to the Bank the amount claimed.
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Registered address and notices.
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48.
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(1) Every person-
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(a) to whom a loan is granted by the Bank on the mortgage of movable, or immovable property or on the basis of a guarantee ; or
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(b) who has obtained probate of the will or letters of administration to the estate of a person to whom any loan has been so granted, or who, upon application made in that behalf by the Bank, has been appointed by court to represent such estate; or
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(c) to whom any right, title or interest whatsoever in any movable or immovable property mortgaged to such bank as security for any loan has passed, whether by voluntary conveyance or by operation of law, shall register with the Bank an address to which all notices to him may be addressed.
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(2) Any notice which is required to be served on any person to whom subsection (1) applies shall be deemed to have been duly served on that person if it is sent by post in a registered letter directed to that person at the address registered by him under that subsection, and the service shall be deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post:
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Provided that, where any such person fails to register his address under subsection (1), the Bank shall publish in the Gazette and in a daily newspaper, a notice addressed to him, and such notice shall be deemed to be duly given to him on the day on which such notice was published.
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No director or employee of the Bank to guarantee loans.
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49. No director or employee of the Bank shall guarantee the repayment of any loan granted by the Bank to any other person.
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Restrictions on loans to directors, & c.
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50.
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(1) No loan shall be granted by the Bank to any director or to the spouse or a dependent child of a director or to any company or firm in which a director has a substantial interest, except for the purpose of purchase or construction, of a house on the mortgage of an adequate immovable property.
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(2) For the purposes of subsection (1), ” substantial interest””
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(a) when used in relation to a company, means the holding of a beneficial interest by a director of the Bank or his spouse or dependent child, whether singly or taken together, in the shares of the company, if the amount paid up in respect of the holding exceeds five per centum of the paid-up capital of the company, and
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(b) when used in relation to a firm, means the beneficial interest held in the firm by a director of the Bank or his spouse or his dependent child, whether singly or taken together, if the beneficial interest exceeds in value five per centum of the total capital subscribed by all the partners of the firm,
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Priority of charge created by loan granted by Bank.
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51. Where a loan is granted by the Bank on the mortgage of any movable or immovable property, that property shall from and after the date of the registration of such mortgage be charged with the payment of the loan with interest in priority to every other debt, mortgage or charge affecting it, except a debt which is secured by a mortgage duly registered prior to such date and which is due to a creditor who in good faith advanced the money before the loan was granted by the Bank.
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Power of Bank to inspect valuation rolls of local rating or taxing authority.
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60. For the purpose of deciding whether any immovable property tendered as security for a loan should or should not be accepted, the Bank shall have access without fee or charge to the valuation roll of any local rating or taxing authority, and the officers of every such authority shall upon application supply to the Bank full particulars as to any valuation of property in respect of which such authority is empowered under the provisions of any law to levy any rate or tax.
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Certain payments to be made from the funds of the Bank.
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75. The payment of the principal of any loans and payments in respect of deposit and savings accounts and the surrender value of savings certificates shall be made out of the funds of the Bank.
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Loans from the central Bank.
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76. In the event of the Bank being short Loans from the of liquid funds to meet withdrawals from deposit or savings accounts or the redemption of savings certificates, the Bank is hereby authorized to borrow from the Central Bank against Government securities.
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Appointment of public officers to the staff of the Bank.
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77.
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(1) At the request of the Bank, any officer in the public service may, with the consent of that officer and the Secretary to the Ministry charged with the subject of Public Administration, be temporarily appointed to the staff of the Bank for such period as may be determined by the Bank with like consent or be permanently appointed to such staff.
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(2) Where any officer in the public service is temporarily appointed to the staff of the Bank, the provisions of subsection (2) of section 13 of the Transport Board Law, No. 19 of 1978, shall, mutatis mutandis, apply to and in relation to him.
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(3) Where any officer in the public service is permanently appointed to the staff of the Bank, the provisions of subsection (3) of section 13 of the Transport Board Law, No. 19 of 1978, shall, mutatis mutandis, apply to and in relation to him.
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(4) Where the Bank employs any person who has entered into a contract with the Government by which he has agreed to serve the Government for a specified period, any period of service to the Bank by that person shall be regarded as service to the Government for the purpose of discharging the obligations of such contract.
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Debt Conciliation Ordinance not to apply to debts due to the Bank.
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78. Nothing in the Debt Conciliation Ordinance or the Mediation Board Act, No. 72 of 1988 shall apply or be deemed to apply to any debt due to the Bank, or to prejudice or affect the rights of the Bank in respect of the recovery of any such debt.
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Pawnbrokers Ordinance not to apply.
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79. the provisions of the Pawnbrokers Ordinance (Chapter 90) shall not apply in respect of pawn broking business undertaken by the Bank.
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Exemption from stamp duty.
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80. Notwithstanding anything in the Stamp Ordinance*, any instrument or document whatsoever required or authorized to be made or executed by the Bank, and any instrument or document made or executed by any other party in respect of withdrawals from deposit or savings accounts and redemption of savings certificates, in pursuance of the provisions of this Act or any rule made thereunder, and any instrument or document whatsoever made or executed in connexion with the business of the Bank by the Bank, other than a certificate of sale under section 55, shall be exempt from the payment of duty under that Ordinance.
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Offences.
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82. Any person who-
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(a) contravenes or fails to comply with any provision of this Act or rule made thereunder; or
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(b) obstructs any person in the exercise, performance or discharge of any power, duty or function under this Act or any rule made thereunder, shall be guilty of an offence and shall, on conviction after summary trial before a Magistrate, be liable to a fine not exceeding one thousand rupees, or to imprisonment of either description for a period not exceeding three months, or to both such fine and imprisonment.
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Offences by bodies of persons.
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83. Where an offence under this Act is committed by a body of persons, then”
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(a) if the body of persons is a body corporate, every director or officer of that body; or
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(b) if the body of persons is other than a body corporate, every member of that body, shall be deemed to be guilty of such offence:
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Provided, however, that no such director, officer or member shall be deemed to be guilty of such offence if he proves that such offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
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84.
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(1) The Board may make rules for the purpose of carrying out or giving effect to the principles and provisions of this Act.
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(2) Without prejudice to the generality of the powers conferred by subsection (1), the Board may make rules for or in respect of all or any of the following matters :”
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(a) all matters stated or required by this Act to be prescribed or for which rules are authorized to be made by this Act;
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(b) the appointment, promotion, remuneration, disciplinary control and conduct of the officers and servants of the Bank and the grant of leave to them;
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(c) the forms to be used for any of the purposes of this Act;
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(d) the use of pass books or any similar documents by persons who have deposits and savings accounts;
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(e) facilities for the drawing of cheques by persons who have accounts subject to such restrictions and (qualifications as may foe specified by the Monetary Board including restrictions with regard to the type of accounts, the class of depositors, the maximum amount of each drawing and the frequency of drawings and
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(f) the use of pass books or any similar documents by persons who have deposit and savings accounts;
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(g) facilities for the drawing of cheques by persons who have accounts subject to such restrictions and qualifications as may be specified by the Monetary Board, including restrictions with regard to the type of accounts, the class of depositors, the maximum amount of each drawing and the frequency of drawings;
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(3) Every rule made under this Act by the Board shall be published in the Gazette, and shall come into operation on such date as may be specified in such rule or, if no such date is so specified, on the date of such publication.
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Regulations.
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85.
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(1) The Minister may make regulations for all matters for which regulations are authorized to be made under this Act.
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(2) Every regulation made by the Minister shall be published in the Gazette and shall come into operation on such date as may be specified in the regulation or if no such date is so specified on the date of such publication.
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(3) Every regulation made by the Minister shall be brought before Parliament as soon as may be after the publication thereof by a motion that such regulation be approved.
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(4) Any regulation which Parliament refuses to approve shall be deemed to be rescinded but without prejudice to the validity of anything previously done thereunder. The date on which the regulation shall be deemed to be rescinded shall be the date on which Parliament refuses to approve the regulation.
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(5) Notification of the date on which any regulation made by the Minister is deemed to be rescinded shall be published in the Gazette.
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Repeal of certain laws dissolution of certain institutions, consequential provisions.
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86.
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(1) The Ceylon Savings Bank Ordinance, the Ceylon Post Office Savings Bank Ordinance and the Savings and Certificates Ordinance are hereby repealed commencement of business by the Bank as may be fixed for the purposes of this Act by the Minister by Order published in the Gazette.
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(2) With effect from the date of the repeal of the Ordinances specified in subsection (1)”
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(a) the rights, obligations, assets and liabilities of the Ceylon Savings Bank and the Ceylon Post Office Savings Bank and in respect of the Savings Certificates Fund on the day immediately preceding that date shall be the rights, obligations, assets and liabilities of the Bank ;
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(b) all deposits in the Ceylon Savings Bank and the Ceylon Post Office Savings Bank shall be deemed to be moneys lying, for the same period of time for the purpose of calculating interest, to the credit of persons in whose names the deposits are, on the day immediately preceding that date, in deposit and savings accounts of such type as the Board may determine;
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(c) every entry made in any depositor’s book under the Ceylon Savings Bank Ordinance, or the Ceylon Post Office Savings Bank Ordinance shall be deemed to be an entry made under this Act and the rules made thereunder;
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(d) the investments made in the name of the board of directors of the Ceylon Savings Bank, the investments made by the board of trustees of the Ceylon Post Office Savings Bank and the investments made and the loans granted by the trustees of the Savings Certificates Fund shall be deemed to be investments made by the Bank under this Act;
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(e) every post office appointed by the Postmaster-General to be an office for the transaction of the business of the Ceylon Post Office Savings Bank under the Ceylon Post Office Savings Bank Ordinance and every office deemed under subsection (2) of section 4 of that Ordinance to be an office of the Ceylon Post Office Savings Bank shall be deemed to be a branch office for the transaction of the business of the Bank appointed by the Official Authority under subsection (2) of section 5 of this Act on terms and conditions as far as may be, inclusive of remuneration, subsisting immediately prior to that date ;
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(f) any savings certificate issued under the Savings Certificates Ordinance shall be deemed to be a savings certificate issued under this Act as regards surrender value and all other terms, conditions and restrictions subject to which it was issued;
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(g) any savings stamp issued by the Commissioner-General of Inland Revenue for the purposes of the Savings Certificates Ordinance shall in all respects be deemed to be a savings stamp issued by him for the purposes of this Act;
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(h) an approved savings group under the Savings Certificates Ordinance shall be deemed to be an approved savings group under this Act;
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(i) an authority by resolution of Parliament to borrow money by the issue of savings certificates under the Savings Certificates Ordinance shall be deemed to be an authority by the Monetary Board under section 63 of this Act for the Bank to borrow the like sum;
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(j) a direction under subsection (2) of section 3 of the Savings Certificates Ordinance by the Minister charged with the administration of the subject and function of savings certificates to the Postmaster-General to borrow any sum of money by the issue of savings certificates shall be deemed to be an authority by the Monetary Board under subsection (2) of section 64 of this Act for the Bank to borrow the like sum;
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(k) the regulations and notifications made under the Savings Certificates Ordinance shall be deemed to be rules and notifications made under this Act;
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(l) the officers and servants of the Ceylon Savings Bank shall be deemed to be officers and servants of the Bank on conditions not less favourable than those subsisting immediately prior to that date: Provided that where the Bank is unable to offer suitable employment to any such officer or servant the Bank shall pay compensation to such officer or servant on such scale as may be prescribed ;
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(m) the obligation of the Ceylon Savings Bank to pay pensions and allowances to retired officers and servants of that Bank shall be deemed to be the obligation of the Bank;
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(n) all contracts, deeds, bonds, agreements and other instruments which subsist or have effect immediately prior to that date and to which the board of directors of the Ceylon Savings Bank, the trustees of the Ceylon Post Office Savings Bank or the Postmaster-General acting under the provisions of the Ceylon Post Office Savings Bank Ordinance, or the trustees of the Savings Certificates Fund or the Postmaster-General acting under the provisions of the Savings Certificates Ordinance are a party, other than any contract of employment with any public servant or any officer or servant of the Ceylon Savings Bank or the Ceylon Post Office Savings Bank, shall have effect against or in favour of the Bank, as the case may be, as fully and effectively as if, instead of such board of directors or trustees or the Postmaster-General, the Bank had been a party thereto;
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(o) all suits, appeals or other legal proceedings instituted by, or against, the board of directors of the Ceylon Savings Bank, the trustees of the Ceylon Post Office Savings Bank or the Postmaster-General acting under the provisions of the Ceylon Post Office Savings Bank Ordinance or the trustees of the Savings Certificates Fund or the Postmaster-General acting under the provisions of the Savings Certificates Ordinance and pending immediately prior to that date shall not abate or be discontinued or be in any way prejudicially affected by reason of such repeal, and accordingly may be continued and enforced by, or against, the Bank.
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87. In this Act, unless the context otherwise requires”
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” agency ” means an agency appointed by the Bank;
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” appointed director” means a person who is appointed to be or to act as a director;
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” Central Bank ” means the Central Bank of Ceylon established under the Monetary Law Act;
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” Chairman ” means the Chairman of the Board;
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“commercial bank” means a company carrying on banking business and licensed under the provisions of the Banking Act, No. 30 of 1988 as a licensed commercial bank;
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” director” means a member of the Board;
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“financial accommodation ” means any direct or indirect advance granted by the Bank on behalf of a customer, where the Bank has guaranteed or otherwise committed itself on behalf, such customer;
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” guardian” in relation to a minor means, the father or mother of the minor and where the father and mother are not living, the grandfather or grandmother of the minor or any person in whose care and legal custody the minor is liar the time being;
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“licensed commercial bank” and “licensed specialized bank” shall have the same meaning, respectively as in Banking Act. No. 30 of 1988;
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” local authority” means a Municipal Council Urban Council, a Pradeshiya Sabha and includes any authority created or established by or under any written law to exercise, perform and discharge, powers, duties and functions corresponding to or similar to the powers, duties and functions, exercised, performed and discharged by any such Council or Sabha ;
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” Minister” means the Minister in charge of the subject of Finance ;
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“Monetary Board means the Monetary Board of the Central Bank established under the Monetary Law Act;
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” Postmaster-General ” means the person for the time being appointed to be, or to act as, the Postmaster-General of Sri Lanka;
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” prescribed ” means prescribed by rules made under this Act;
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“Provincial Council” means a Provincial Council established under Chapter XVIIA of the Constitution ;
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” purchase price”, when used with reference to a savings certificate, means the sum of money paid or to be paid for that savings certificate at the time of the issue thereof;
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” purchaser ” when used with reference to savings certificate means the persons or body of persons to whom a savings certificate is issued under this Act;
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” rule ” means a rule made by the Board under this Act;
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” savings certificate ” or ” certificate ” means a certificate which is issued or deemed to be issued under this Act by the Bank to any person on payment of the purchase price on the condition that such person, by virtue of the said payment, becomes entitled, on surrender of that certificate, to receive its surrender value at the time of such surrender;
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“Saving instrument or product means any instrument or product that will enable the bank to mobilize savings;
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“surrender value”, when used with reference to a savings certificate, means the sum of money which at any time the purchaser of that certificate is entitled to receive on the surrender thereof.
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