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Short title.
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1. This Act may be cited as the People’s Bank Act.
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Establishment of the People’s Bank.
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2.
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(1) There shall be established a bank which shall be called the People’s Bank (hereafter in this Act referred to as the Bank) and which shall consist of the persons who are for the time being shareholders of 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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Seal of the Bank.
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3.
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(1) The seal of the Bank shall be judicially noticed and shall be in the custody of the Board of Directors of the Bank.
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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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Purposes of the Bank.
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4. The purposes of the Bank shall be to develop the co-operative movement of Sri Lanka, rural banking and agricultural credit, by furnishing financial and other assistance to co-operative societies, approved societies. Cultivation Committees* and other persons.(* Cultivation Committees established under the repealed Paddy Lands Act, No. 1 of 1958, continued to function until Cultivation Committees were constituted under the Agricultural Lands Law, No. 42 of 1973. Cultivation Committees ceased to exist upon the repeal of the Agricultural Lands Law by the Agrarian Services Act (No. 58 of 1979), and under that Act the assets and liabilities of Cultivation Committees were transferred to the Agrarian Services Committees established under that Act.)
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powers of the Bank-
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5.
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(1) In carrying out its purposes, the Bank may exercise all or any of the following powers:-
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(a) to grant, subject to the provisions of subsection (2)-
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(i) short-term, medium-term and long-term loans and other accommodation to cooperative societies, approved societies and Cultivation Committees ;
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* (ii) short-term, medium-term and long-term loans to cooperative societies, approved societies. Cultivation Committees* and individuals for constructing, repairing or renovating buildings;
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(iii) short-term, medium-term and long-term loans and other accommodation to any person who intends to carry on or is carrying on any agricultural, industrial or business undertaking which, in the opinion of the Board of Directors of the Bank, is a small-scale undertaking;
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(iv) short-term, medium-term and long-term loans and other accommodation to persons who are the owners of holdings alienated under the Land Development Ordinance for their requirements;
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(v) short-term, medium-term and long-term loans and other accommodation to persons who are holders of grants of land alienated by way of sale under the provisions of the Sale of State Lands (Special Provisions) Law ;* and(* See List of Enactments omitted from the Revised Edition.)
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(vi) short-term loans to persons resident in rural areas for the purchase of articles necessary for their personal or domestic requirements;
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(b) to carry on and transact, subject to such modifications and exceptions as may be prescribed, the kinds of business similar to those carried on and transacted by the Bank of Ceylon under the Bank of Ceylon Ordinance;
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(c) to carry on the business of a pawnbroker subject to such conditions as may be prescribed ;
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(d) to provide technical assistance to any person to whom the Bank grants any loan or overdraft, and to undertake or sponsor the training of persons in assessing the value of land and the credit worthiness of borrowers, in assaying gold, in banking and in finance ;
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(e) to acquire, hold, take or give on lease or hire, mortgage, pledge and sell or otherwise dispose of any immovable or movable property;
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(f) to invest the idle funds of the Bank in such securities as the Board of Directors of the Bank may consider appropriate;
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(g) to employ such officers and servants as may be necessary for carrying out the work of the Bank;
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(h) to make rules in respect of the conditions of service and disciplinary control of the officers and servants of the Bank;
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(i) to establish provident funds and pension funds for, and schemes for the benefit of, such officers and servants, and to make contributions to such funds and schemes from the funds of the Bank ;
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(j) to borrow funds for the purposes of the business of the Bank and to give security for any loans or overdrafts obtained;
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(k) to enter into contracts; and
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(l) to do all such other things as are connected with, or incidental to, the exercise of the aforesaid powers-
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(2) The Bank shall not exercise the power to grant loans, overdrafts and other accommodation to persons other than co operative societies until the Minister approves of the exercise of that power generally or in respect of such classes of approved societies or Cultivation Committees! or classes of other persons as he may from time to time determine.
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(3) The Pawnbrokers Ordinance shall not apply to the Bank when the Bank carries on the business of a pawnbroker.
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Principal place of business and branches and agencies of the Bank,
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6. The bank shall have its principal place of business in Colombo and may have such branches and agencies as may be necessary for the proper conduct of the business of the Bank.
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Management of affairs and business of the Bank.
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7.
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(1) The general supervision, control and administration of the affairs and business of the Bank shall be vested in the Board of Directors of the Bank (hereafter in this Act referred to as the Board).
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(2) The Board may exercise all or any of the powers of the Bank.
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8.
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(1) The Board shall consist of ten directors appointed by the Minister, two of whom shall be nominated by the Minister in charge of the subject of Co-operatives.
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(2) A person shall be disqualified for being appointed or continuing as a director if he-
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(a) is a Member of Parliament; 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 an 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 imprisonment for a term of not less than six months ; or
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(e) is a director or employee of a commercial bank other than the Bank.
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(3) Any director may resign from office by letter in that behalf addressed to the Minister.
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(4) The Minister may, by Order published in the Gazette, remove a director from office without assigning a reason therefor and such removal shall not be called in question in any court. A director in respect of whom an Order is made under this subsection shall be deemed to have vacated office on the date of publication of that Order in the Gazette.
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(5) A director shall, subject to the provisions of subsections (3) and (4), hold office for a period of three years from the date of his appointment to such office :
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Provided that a director appointed in place of a director who dies or resigns or otherwise vacates office, shall, unless he earlier vacates office, hold office for the unexpired part of the term of office of the director whom he succeeds.
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(6) Where any director becomes, by reason of illness, infirmity or absence from Sri Lanka, temporarily unable to discharge the functions of his office, the Minister may appoint another person to act as director in his place.
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(7) Any director other than a director who has been removed from office under subsection (4) shall be eligible for reappointment.
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(8) All or any of the directors may be paid such remuneration out of the funds of the Bank as may be determined by the Minister.
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(9) The quorum for any meeting of the Board shall be five.
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(10) Subject to the provisions of subsection (9), the Board may regulate the procedure in regard to the meetings of such Board and the transaction of business at such meetings.
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(11) No act or proceeding of the Board shall be invalid by reason only of the existence of a vacancy among the directors or any defect in the appointment of a director.
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General body of the Bank.
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9.
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(1) There shall be a general body of the Bank consisting of the Secretary to the Treasury, the members of the Board and the persons elected by co-operative societies which are shareholders of the Bank to represent such societies in that body.
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(2) Regulations may be made as to the number of persons who may be elected by co-operative societies which are shareholders of the Bank as their representatives in the general body of the Bank, the qualifications to be possessed by such persons and the procedure to be followed in the election of such persons.
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(3) The general body of the Bank shall not be disqualified from performing the functions vested in it by this Act by reason only of the existence of any vacancy among its members.
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The Chairman of the Board.
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10.
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(1) The Minister shall appoint a Chairman of the Board from among the Directors.
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(2) If the Chairman of the Board is by reason of illness, infirmity or absence from Sri Lanka, temporarily unable to perform the duties of his office, the Minister may appoint another director to act in his place.
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(3) The Minister may, without assigning any reason, terminate the appointment of the Chairman of the Board, and such termination shall not be called in question in any court.
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(4) The Chairman of the Board may resign from the office of Chairman by a letter in that behalf addressed to the Minister.
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(5) The Chairman of the Board shall, unless he earlier vacates the office of Chairman by resignation or removal, hold that office as long as he is a director.
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Director to disclose his interest in any loan or other accommodation to be considered by the Board.
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11. A director who is directly or indirectly interested in any loan or other accommodation to be considered by the Board shall disclose the nature of his interest to the Board and shall not be present while the Board is considering such loan or other accommodation.
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12.
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(1) The authorized capital of the bank shall be one thousand million rupees divided into twenty million shares of fifty rupees each.
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(2) The paid-up capital of the bank shall be such amount as may be determined from time to time by the Minister by Order published in the Gazette.
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Sale of shares.
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13.
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(1) No shareholder of the Bank shall sell his shares to any person other than a co-operative society or the Secretary to the Treasury in his official capacity.
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(2) The Secretary to the Treasury on being authorized in that behalf by the Minister in charge of the subject of Finance may sell to any co-operative society any shares held by him for and on behalf of the State at not less than the par value of those shares, and the proceeds of the sale shall be paid to the Consolidated Fund.
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(3) The Secretary to the Treasury may, with the approval of the Minister in charge of the subject of Finance, purchase any shares offered to him for purchase under subsection (1), and the purchase price shall be paid out of the Consolidated Fund. All shares purchased by the Secretary to the Treasury shall be held by him for and on behalf of the State.
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Liability of a shareholder.
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14 The liability of a shareholder shall be limited to any sum due from him to the Bank in respect of any shares allotted to him.
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Sums to be granted or lent by Government to the Bank.
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15.
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(1) The Government shall-
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(a) grant to the Bank out of top Consolidated Fund-
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(i) a sum of five hundred thousand rupees out of which the preliminary expenses connected with the establishment of the Bank, other than any expenses relating to the construction of buildings, shall be defrayed and any balance of which after such preliminary expenses are defrayed shall be disposed of as provided by subsection (4) of section 22;
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(ii) two million rupees which shall be disposed of as provided by subsection (2) and subsection (5) of section 22; and
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(iii) such sums as may be authorized by resolution of Parliament to be granted out of the Consolidated Fund for the settlement of the bad and doubtful debts in excess of the assets of any co-operative bank which is dissolved under the provisions of this Act; and
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(b) lend to the Bank such sums as may be authorized by resolution passed by Parliament to be lent to the Bank out of the Consolidated Fund for the granting of long-term or medium-term loans by the Bank.
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(2) Every sum lent out of the Consolidated Fund to the Bank under paragraph (b) of subsection (1) shall be repaid by the Bank in accordance with such terms and conditions as may be determined by the Minister with the concurrence of the Minister in charge of the subject of Finance.
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Commencement of business by the Bank.
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16.* The Bank shall not commence business until a certificate signed by the Minister authorizing the Bank to commence business has been given. (* Authorized to commence business on the 1st day of July, 1961-Vide Gazette Extraordinary No. 12,498 of 26th June, 1961.)
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Powers of the Permanent Secretary until commencement of business by the Bank.
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17. The Permanent Secretary to the Ministry may, upon the enactment of this Act 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 any of the acts which the Board is by this Act empowered to do ; 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 Permanent Secretary may be continued by the Board.
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18.
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(1) Any act done by the Permanent Secretary to the Ministry under section 17 shall, for all purposes, have the same effect as if such act had been done by the Board.
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(2) The Board may continue any action or thing commenced by the Permanent Secretary to the Ministry and 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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Building Fund.
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19.
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(1) There shall be established for the purposes of this Act a fund to be known as the Building Fund.
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(2) The Government shall grant to the Bank out of the Consolidated Fund one million rupees to be credited by the Bank to the Building Fund.
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(3) The moneys in the Building Fund shall be utilized for the purchase of lands and buildings, and the construction of buildings, for the Bank and for the maintenance and repair of such buildings.
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The Bank to raise money the issue of debentures for granting medium-term and long-term loans.
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20.
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(1) In addition to the sums lent by the Government under section 15 (1) (b) to by the Bank for the purpose of granting long- term or medium-term loans, the Bank may, subject to the provisions of subsection (2) and such regulations as may be made under this Act from time to time, raise, or with the approval of the Minister given with the concurrence of the Minister in charge of the subject of Finance request the Monetary Board of the Central Bank of Ceylon to raise on its behalf, any sums by the issue of debentures.
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(2) No debentures shall be issued under subsection (1) without the approval of the Minister in charge of the subject of Finance given after consultation with the Monetary Board of the Central Bank of Ceylon.
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(3) The Monetary Board of the Central Bank of Ceylon shall comply with a request made under subsection (1) if the issue of the debentures necessary for compliance with that request is approved by the Minister in charge of the subject of Finance.
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Government guarantee.
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21.
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(1) The Minister in charge of the subject of Finance shall guarantee-
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(a) the repayment of any sum due to the Bank on any loan, overdraft or other accommodation granted by the Bank with the approval of such Minister under the proviso to section 26; and
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(b) the repayment of any sum due on debentures issued under this Act.
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(2) Any sum required for the fulfillment of a guarantee provided under subsection (1) may, with the approval of Parliament, be paid out of the Consolidated Fund.
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(3) Any sum paid out of the Consolidated Fund in fulfillment of a guarantee provided under subsection (1) (6) shall be repaid, together with interest thereon at such rate as the Minister in charge of the subject of Finance may determine with the concurrence of the Minister, by the Bank in such manner and over such period as the Minister in charge of the subject of Finance may, with such concurrence, determine.
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(4) Immediately after a guarantee is given under subsection (1), the Minister in charge of the subject of Finance shall lay a statement of the guarantee before Parliament.
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(5) Where any sum is paid out of the Consolidated Fund in fulfillment of a guarantee provided under subsection (1), the Minister in charge of the subject of Finance shall forthwith lay before Parliament a statement that such sum has been paid.
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General Reserve and Special Reserve.
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22.
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(1) The Bank shall establish a General Reserve.
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(2) The Bank shall credit to its General Reserve one-half of the two million rupees referred to in section 15 (1) (a) (ii).
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(3) The Bank shall establish a Special Reserve for bad and doubtful debts.
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(4) Where any sum out of the five hundred thousand rupees referred to in section 15 (1) (a) (i) is left after the preliminary expenses mentioned in that section are defrayed, the Bank shall credit that sum to its Special Reserve.
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(5) The Bank shall credit to its Special Reserve one-half of the two million rupees referred to in section 15 (1) (a) (ii).
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Dissolution of the Co operative Federal bank of Ceylon, Limited.
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23.
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(1) With effect from such date (hereafter in this section referred to as the appointed date) as may be appointed by the Minister by Order published in the Gazette*-
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(a) the Co-operative Federal Bank of Ceylon, Limited, shall be deemed to have been dissolved, and
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(b) the assets and liabilities of the Co- operative Federal Bank of Ceylon, Limited, shall be the assets and liabilities of the Bank.
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(2) On and after the appointed date-
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(a) all contracts, deeds, bonds, agreements and other instruments which subsist or have effect on the day immediately preceding that date and to which the Co-operative Federal Bank of Ceylon, Limited, is a party shall have effect against or in favour of the Bank, as the case may be, and may be enforced as fully and effectually as if, instead of the Co-operative Federal Bank of Ceylon, Limited, the Bank had been a party thereto; and
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(b) all suits, appeals or other legal proceedings instituted by or against the Co-operative Federal Bank of Ceylon, Limited, and pending on the day immediately preceding that date shall not abate or be discontinued or be in any way prejudicially affected by reason of the dissolution of the Co-operative Federal Bank of Ceylon, Limited, and may be continued and enforced by or against the Bank, as the case may be:
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Provided that nothing in paragraph (a) of this subsection shall be construed as curtailing in any manner the right of the Bank to terminate the services of, or to vary the conditions of service of, any officer or servant of the Bank who, on the day immediately preceding the appointed date, was an employee of the Co-operative Federal Bank of Ceylon, Limited.
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* 1st July 1961, appointed by Order published in Gazette Extraordinary No. 12,498 of 26th June 1961.
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Power of Minister to dissolve a co-operative bank.
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24.
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(1) Where the Minister is satisfied-
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(a) on written information received from the Commissioner of Co-operative Development, that a co-operative bank-
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(i) has been conducting its affairs continually in an unsatisfactory or inefficient manner, or
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(ii) desires that it should be dissolved and that its business should be taken over by the Bank. and
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(b) that the Bank agrees to take over the business of such co-operative bank, he may, by Order published in the Gazette, declare that, with effect from the date specified in that Order,-
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(i) such co-operative bank shall be deemed to have been dissolved, and
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(ii) the assets and liabilities of such cooperative bank shall be the assets and liabilities of the Bank.
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(2) On and after the date on which an Order under subsection (1) relating to a cooperative bank takes effect-
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(a) all contracts, deeds, bonds, agreements and other instruments which subsist or have effect on the day immediately preceding that date and to which such co-operative bank is a party shall have effect against or in favour of the Bank, as the case may be, as fully and effectually as if, instead of such cooperative bank, the Bank had been a party thereto ; and
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(b) all suits, appeals or other legal proceedings instituted by or against such co-operative bank and pending on the day immediately preceding that date shall not abate, or be discontinued or be in any way prejudicially affected by reason of the dissolution of such co-operative bank, and may be continued and enforced by or against the Bank, as the case may be.
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Deposit of money and obtaining of long-term or medium-term loans by co-operative societies.
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25. After the commencement of business by the Bank-
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(a) no co-operative society shall, unless exempted in writing by the Commissioner of Co-operative Development, deposit its funds in, or maintain any current or deposit account with, any commercial bank other than the Bank, and
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(b) no co-operative society shall, except with the written approval of the Commissioner of Co-operative Development, obtain a medium-term or long-term loan from any commercial bank other than the Bank.
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Loans, overdrafts and other accommodation to be granted only in certain circumstances.
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26. No loan, overdraft or other accommodation shall be granted by the Bank to any person unless the Board is satisfied that he is worthy of credit up to the amount of such loan, overdraft or other accommodation or that such amount is secured by adequate security, or that the project or scheme to which such amount is to be applied is financially sound :
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Provided that the Bank may grant any loan, overdraft or other accommodation to any co-operative society, approved society or Cultivation Committee* which is unable to satisfy the Board as to the requirements contained in the preceding provisions of this section if the grant of such loan, overdraft or other accommodation is approved by the Minister in consultation with the Minister in charge of the subject of Finance and if the Minister in charge of the subject of Finance guarantees under section 21 (1) (a) the repayment of such loan, overdraft or other accommodation.
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.(* Cultivation Committees established under the repealed Paddy Lands Act, No. 1 of 1958, continued to function until Cultivation Committees were constituted under the Agricultural Lands Law, No. 42 of 1973. Cultivation Committees ceased to exist upon the repeal of the Agricultural Lands Law by the Agrarian Services Act (No. 58 of 1979), and under that Act the assets and liabilities of Cultivation Committees were transferred to the Agrarian Services Committees established under that Act.)
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Power of the Board to inspect valuation rolls of local rating or taxing authority.
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27. For the purpose of deciding whether any immovable property tendered as security for any loan, overdraft or other accommodation should or should not be accepted by the Bank, the Board 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 Board full particulars as to any valuation of property in respect of which such authority has power under the provisions of any law to levy any rate or tax.
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Registered address of borrower, amp c.
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28.
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(1) Every person-
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(a) to whom any loan, overdraft or other accommodation is granted by the Bank, 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, overdraft or other accommodation has been granted by the Bank, or who, upon application made in that behalf by the Board, 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 immovable property mortgaged to that Bank as security for any loan, overdraft or other accommodation has passed, whether by voluntary conveyance or by operation of law,
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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 (I), 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 is last published.
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Default of payment.
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29. Where default is made in the payment of any sum payable as an installment in repayment of the amount of any loan, overdraft or other accommodation granted by the Bank on the mortgage of any immovable property or as interest on that loan, overdraft or other accommodation, default shall be deemed to have been made in respect of the whole of such portion of the amount of that loan, overdraft or other accommodation as has not been repaid to the Bank and the interest due thereon.
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Certain provisions of Agricultural and Industrial Credit Corporation Ordinance* to apply in case of default of payment.
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30. Where under section 29 a default is deemed to have been made in respect of any sum, the provisions of sections 69 and 84 (both sections inclusive) of the Agricultural and Industrial Credit Corporation Ordinance* shall apply for the purpose of the recovery of that sum in like manner as if those provisions were part of this Act, and in such application those provisions shall have effect as if-
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(a) every reference therein to the ” board ” were a reference to the Board of Directors of the Bank;
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(b) every reference therein to the ” corporation ” were a reference to the Bank;
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(c) every reference therein to a “loan” were a reference to a loan or an overdraft or any other accommodation granted by the Bank;
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(d) every reference therein to the ” Ordinance ” were a reference to this Act;
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(e) the reference in section 73 of those provisions to ” section 63 ” were a reference to section 28 of this Act; and
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(f) the reference in section 80 (3) of those provisions to ” the form B in the Schedule ” were a reference to ” such form as may be prescribed “, and the reference in that section to ” the form C in that Schedule ” were a reference to ” such form as may be prescribed “.(* Repealed by section 85 of the State Mortgage and Investment Bank Law, No. 13 of 1978-See Part V of that Law. )
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Delegation of powers and duties of the board.
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32.+
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(1) There shall be a General Manager of the bank who shall be the Bank’s chief executive officer and who shall conduct the business of the Bank under the general supervision and control of the Board.
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(2) The Board may delegate any of its powers or duties to any officer of the Bank and may revoke any such delegation either wholly or in part and either as to persons or purposes.
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(3) An officer to whom any power or duty of the Board is delegated under this section shall, in the exercise or performance of that power or duty, conform to all such directions as may be given by the Board. All acts done by such officer in conformity with such directions and in fulfillment of the purposes of the delegation made to him, but not otherwise, shall have the like force and effect as if done by the Board.(+ Section 31 is repealed by Act No. 11 of 1963.)
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Accounts.
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33. 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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Audit.
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34.
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(1) The accounts of the Bank for each financial year shall be submitted to the Auditor-General for audit before the thirtieth day of June of the succeeding year. For the purposes of assisting him in the audit of such accounts, the Auditor-General may employ the services of any qualified auditor or auditors who shall act under his direction and control.
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(2) For the purpose of meeting the expenses incurred by him in the audit of the accounts of the Bank, the Auditor-General shall be paid by the Bank such remuneration as the Minister may determine with the concurrence of the Minister in charge of the subject of Finance. Any remuneration received from the Bank by the Auditor-General shall, after deducting any sums paid by him to any qualified auditor employed by him for the purposes of such audit, be credited to the Consolidated Fund.
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(3) The Auditor-General and any person assisting the Auditor-General in the audit of the accounts of the Bank shall have access to all such books, deeds, contracts, accounts, vouchers and other documents of the Bank as the Auditor-General may consider necessary for the purposes of the audit, and shall be furnished by the Board and the Bank with such information within their knowledge as may be required for such purposes.
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(4) The Auditor-General shall examine the accounts of the Bank and furnish a report-
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(a) stating whether he has or has not obtained all the information and explanations required by him,
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(b) stating whether the accounts referred to in the report are properly drawn up so as to exhibit a true and fair view of the affairs of the Bank, and
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(c) drawing attention to any item in the accounts which in his opinion may be of interest to Parliament in any examination of the activities and accounts of the Bank.
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(5) The Auditor-General shall transmit his report to the Board.
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(6) For the purposes of this section, the expression ” qualified auditor ” means-
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(a) an individual who, being a member of the Institute of Chartered Accountants of Sri Lanka, or of any other Institute established by law, possesses a certificate to practice as an Accountant issued by the Council of such Institute; or
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(b) a firm of Accountants each of the resident partners of which, being a member of the Institute of Chartered Accountants of Sri Lanka or of any other Institute established by law, possesses a certificate to practice as an Accountant issued by the Council of such Institute.
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Documents to be transmitted to the Minister and the Minister in charge of the subject of Finance to be laid before Parliament.
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35.
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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 and the Minister in charge of the subject of Finance:-
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(a) Auditor-General’s report.
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(c) Report of the Board on the work of the Bank.
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(2) The Minister shall lay copies of the documents transmitted to him under subsection (1) of this section before Parliament.
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(3) On receipt by the Board of the Auditor-General’s report for any financial year, the Chairman of the board shall without delay convene a meeting of the general body of the Bank and shall submit that report together with the documents referred to in items (b) and (c) of subsection (1) for consideration at that meeting,
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Power of certain officers of the Bank to examine the books and accounts of any cooperative society to which, and of any other person to whom, a loan has been granted by the Bank.
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36.
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(1) The General Manager of the Bank, or an accountant or other officer of the Bank authorized in that behalf by such General Manager, may-
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(a) examine the books and accounts of any co-operative society to which, or other person to whom, any loan, overdraft or other accommodation has been granted by the Bank or by any other co-operative society to which the Bank has granted any loan, overdraft or other accommodation;
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(b) examine any office-bearer, member or employee of any such co-operative society or other person as is first mentioned in paragraph (a) of this subsection for the purpose of ascertaining the true condition of the affairs of that co-operative society or other person;
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(c) direct any such office-bearer, member or employee as is referred to in paragraph (b) of this subsection to furnish to the officer of the Bank giving the direction any such information as that officer may require for the purpose mentioned in that paragraph ; and
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(d) direct any such office-bearer, member or employee as is referred to in paragraph (A) of this subsection to produce for inspection by the officer of the Bank giving the direction any books, records or other documents in the possession of that office-bearer, member or employee and containing or likely to contain any such information as may be required by that officer for the purpose mentioned in that paragraph.
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(2) Every officer of the Bank exercising the powers conferred by subsection (1) shall, for the purposes of the Oaths Ordinance, be deemed to be a person having by law authority to receive evidence in regard to the affairs of the co-operative society in respect of which such powers are exercised.
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(3) No person shall, without reasonable cause, fail or refuse to be examined or to answer any question when examined, or to comply with any direction given, under subsection (I).
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(4) No person shall, in furnishing any information or producing any books, records or other documents under subsection (I), furnish any information which he knows to be false or incorrect or produce any books, records or other documents which contain statements which he knows to be false or incorrect.
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(5) No person shall obstruct any officer of the Bank in the exercise of powers conferred by subsection (1).
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The Board’s powers to recommend to the Commissioner of Cooperative Development the dissolution and liquidation of a co-operative society which, on the examination of its affairs under section 36, is found to be insolvent, amp;c.
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37. Where the General Manager of the Bank is satisfied, after an examination of the affairs of a co-operative society under section 36, that such co-operative society is insolvent or that its continuance in business is likely to result in loss to its creditors, he shall make a report on the affairs of such co-operative society to the Board, and if the Board, after considering such report, is of the opinion that action should be taken to dissolve and liquidate such co-operative society, the Board shall recommend such action to the Commissioner of Co-operative Development.
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Offences,
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38. Every person who contravenes or fails to comply with any of the provisions of this Act shall be guilty of an offence.
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Punishment for offences.
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39. Every person who is guilty of an offence under this Act shall be liable, on conviction after summary trial before a Magistrate, to a fine not exceeding five hundred rupees or to imprisonment of either description for a term not exceeding one month or to both such fine and imprisonment.
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Offences by body of persons.
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40. Where any 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 and officer of that body corporate, and
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(b) if the body of persons is a firm, every partner of that firm, shall be deemed to be guilty of such offence:
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Provided that no such director, officer or partner 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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Exemption from income tax and stamp duty.
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41. Notwithstanding anything in any other written law the Board and the Bank shall be exempt from the payment of stamp duty on any instrument executed by, on behalf of, or in favour of the Board or the Bank in cases where, but for the exemption, the Board or Bank would be liable to pay the duty chargeable in respect of such instrument.
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The Bank to be deemed to be a suitable person to manage and administer the affairs of certain co-operative societies.
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42. Where the Bank grants any loan, overdraft or other accommodation to a co operative society and thereafter the committee of that co-operative society is dissolved under section 48 of the Co operative Societies Law, the Bank shall be deemed-
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(a) for the purposes of subsection (1) of that section, to be a suitable person, and
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(b) for the purposes of subsection (3) of that section, to be a fit and proper person, to manage and administer the affairs of that co-operative society.
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Minister to give directions.
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42A. The Minister may from time to time give general or special directions in writing to the Board as to the performance of the duties and the exercise of the powers of the bank and it shall be the duty of the Board to comply with such directions.
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Regulations.
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43.
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(1) The Minister may make regulations for the purpose of carrying out or giving effect to the principles and provisions of this Act.
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(2) In particular and without prejudice to the generality of the powers conferred by subsection (1), the Minister may make regulations in respect of the following matters:-
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(a) any matter required by this Act to be prescribed or in respect of which regulations are authorized or required by this Act to be made;
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(b) the manner of application for shares of the Bank, the registration of holders of such shares, the issue and renewal of share certificates, the transfer of such shares and any other matter connected with, or incidental to, the aforesaid matters relating to shares;
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(c) the form of debentures, the rate of interest payable thereon, the time or times at which and the manner in which debentures are to be redeemed, the transfer of debentures and any other matter connected with, or incidental to, the aforesaid matters relating to debentures; and
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(d) the charges payable by persons for services rendered by the bank.
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(3) No regulation made by the Minister under this section shall take effect unless it is approved by Parliament and notification of such approval is published in the Gazette.
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This Act to have effect notwithstanding the provisions of the Co-operative Societies Law.
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44. The provisions of this Act shall have effect notwithstanding anything to the contrary contained in the Co-operative Societies Law.
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The provisions of the Companies Ordinance* only to apply to the Bank if they are made applicable by Order of the Minister.
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45.
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(1) The provisions of the Companies Ordinance* shall not apply to the Bank.
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(2) Notwithstanding the provisions of subsection (1), the Minister may, whenever it may seem expedient for him to do so, by Order declare that any such provision of the Companies Ordinance* as is specified in the Order shall apply to the Bank. Every Order made under this subsection shall have the force of law.(*Repealed and replaced by the Companies Act, No. 17 of 1982.)
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Interpretation.
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48. In this Act, unless the context otherwise requires-
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“approved societies” means societies approved for the purposes of this Act by the Minister by Order published in the Gazette;
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“commercial bank” shall have the same meaning as in the Monetary Law Act;
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” co-operative bank ” means a cooperative bank being a society registered or deemed to be registered under the Co-operative Societies Law;
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co-operative society ” means a cooperative society registered or deemed to be registered as a society under the Co-operative Societies Law:
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+ ” Cultivation Committee ” shall have the same meaning as in the Paddy Lands Act, No. 1 of 1958 ;
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” general body of the Bank ” means the general body of the Bank constituted in accordance with the provisions of section 9 of this Act;
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” long-term loan ” means a loan repayable not earlier than ten years after the date of the grant of that loan;
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” medium-term loan ” means a loan repayable not earlier than five years, and not later than ten years, after the date of the grant of that loan;
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“share” means shares in the capital of the Bank;
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“short-term loan” means a loan repayable not later than five years after the date of the grant of that loan.(* Sections 46 and 47 are omitted, as they are repealing and amending provisions.)
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