BUSINESS AND FUNCTION OF THE BANK PART 1 । Bangladesh Bank Order,1972 

BUSINESS AND FUNCTION OF THE BANK PART 1 । Bangladesh Bank Order,1972

BUSINESS AND FUNCTION OF THE BANK PART 1 । Bangladesh Bank Order,1972

BUSINESS AND FUNCTION OF THE BANK PART 1 । CHAPTER III । Bangladesh Bank Order,1972 

16.  The Bank is authorised to carry on and transact the several kinds of business hereinafter specified, namely:-

(1) the accepting of money on deposit without interest form and the collection of money for the Government, local authorities, banks and other persons:

(1A) the accepting of money on deposit, with or without interest, form and the collection of money for foreign Governments, banks, companies, institutions or concerns or foreign nationals

(2) (a) the purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Bangladesh and arising out of bona fide commercial or trade transactions bearing two or more good signatures one of which shall be that of a scheduled bark, and  maturing within one hundred eighty days from the date of such purchase or rediscourt exclusive of days of grace

(b) the purchase, sale and rediscount o bills of exchange and promissory notes, drawn on and payable in Bangladesh and bearing two or more good signatures one of which shall be the of a scheduled bank or the apex co-operative bank and drawn or issued for the purpose of financing seasonal agricultural operations or the marketing of crops and maturing within fifteen months from the date of such purchase or rediscount exclusive of days of grace

Explanation-For the purpose of this sub-clause-

(i) the expression “agricultural operations includes animal husbandry and allied activities jointly undertaken with agricultural operations,

(ii) “corps” include products or agricultural operations.

(iii) the expression “marketing of crops includes the processing of crops prior to marketing by agricultural producers or any organisation of such producers

(c) the purchase, sale and rediscount of bills of exchange and promissory notes drawn of and payable in Bangladesh and bearing two or more good signatures, one of which shall be that of the apex co-operative bank or a financial corporation and drawn or issued for the purpose of financing the production or marketing activities of cottage and small scale industries approved by the Bank and maturing within eighteen months form the date of such purchase or rediscount, exclusive of days of grace:

Provided that payment of the principal and interest of such bills of exchange of promissory notes is guaranteed by the Government to the satisfaction of the Bank.

(d) the making to a corporation declared eligible by the Government in consultation with the Bank of loans and advances –

(i) repayable on demand or no the expiry of fixed periods not exceeding ninety days from
the date of such loan or advance, against securities of the Government; or

(ii) repayable on the expiry of fixed periods not exceeding eighteen months from the date  of such loan or advance, against securities of the Govemment of any maturity, or against bonds and debentures issued by the Corporation to which the loan or advance  is made, and guaranteed by the Government and maturing within a periods not exceeding eighteen months from the date of such loan or advance

(e) the purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Bangladesh and bearing the signature of a scheduled bank, and issued or drawn for the purpose of holding or trading in securities of the Government and maturing within ninety days from the date of such purchase or rediscount, exclusive of days o grace

(f) the purchase, sale and rediscount of bills of exchange and promissory notes drawn of and payable in Bangladesh and bearing two or more apex co-operative bank or nay corporation approved by the Government and having as one of its objects the making of loans and advances in cash or kind, and issued for financing the development of agriculture of agricultural of animal produce or the needs of industry, having maturities not exceeding ten years from the date of such purchase of rediscount.

Provided that the Bank may form time to time issue to a corporation which may have dealings with the Bank under this sub-clause any directions which can be issued to banking company under the Banking Companies Ordinance, 1962 (LVII of 1962), and the event of anybody, while carrying out any direction hereunder, either wilfully making false statement of wilfully omitting to make material statement shall be punishable under sub-section (1) of section 83 of the said Ordinance, and in the event of any contravention or default in compliance with any direction, any Director or officer who is knowingly a party to the contravention of default shall be punishable under sub-section (5) of Section of the said Ordinance, and the provisions of Section 84 of the said Ordinance shall apply to such as if such corporation wore a banking company.

BUSINESS AND FUNCTION OF THE BANK PART 1 । CHAPTER III । Bangladesh Bank Order,1972 

(g) the purchase, sale and rediscount of such Government guaranteed debentures issued by a public company or corporation established by or under any law for the time being in force as the Bank may from time to time approve in this behalf in to guarantee to the extent the Bank deems it issue or loans and debentures by the scheduled banks or financial instutions to rural credit institutiona (0 to guarantee of scheduled bank in agricultural credit operations to the extent the bank deems.

(3)  (a) the purchase and sale of approved foreign exchange

(b) the purchase, sale and rediscount of bits of exchange shading treasury bills drawn if or on any place in countries whose currency has been declared as approved foreign exchange and maturing within one hundred and eighty days from the date of purchase Provided that no such purchase, sale of rediscount shall be made in Bangladesh except with a scheduled Bank

(c) the keeping of balances with banks in countries whose currency has been declared as approved foreign exchange

(4) the making to Local Authorities, scheduled banks or co-operative banks of advances and kans repayable on demand or on the expiry fixed periods not exceeding ninety days against the security of-

(a) stocks funds and securities, other than immovable property, in which a trustee is authorised to invest trust money by any law for the time being in force in Bangladesh

(b) gold or silver or documents of title to the same ;

(c) soch ills of exchange and promissory notes as are eligible for purchase or rediscount by the bank and

(d) promissory notes of any scheduled bank supported be documents of title relating to goods, such documents having been transferred, assigned or pledged to any such bank as security, for a cash credit or overdraft granted for bona fide commercial or trade transactions or for the purpose of financing seasonal agricultural operations or the marketing of crops:

(5) the making of loans and advances out of the Rural Credit Fund established under Article 60 for the purposes specified therein,

(6) the making of loans and advances out of the Agricultural Credit Stabilisation under Article 61 for the purposes specified therein

(7)the making of loans and advances out of the Industrial Credit Fund established under Article 62
Fund established for the purposes specified therein

(8) the making of loans and advances out of the Export Credit Fund established under Article 63 for the purposes specified therein

(9) the making to the Government of advances repayable in each case not later than three months from the date of the making of the advance

(10) the making to institutions or banks, specially established for he purpose of promoting agricultural or industrial development in the country or co-operative banks of advances and loans of such amounts and on such terms and conditions as the Doard may decide form time to time.

(11) the purchase holding and sale of shares and debentures of any company or corporation or institution as may be decided in consultation with the Government

(12) the issue and purchase of telegraphic transfers, demand drafts and other kinds of remittances made payable at its own branchos, offices or agencies

(13) the drawing accepting, making and issue, on its own account or account of the Government, as the case may be of any bit of exchange, hundi, promissory note or engagement for the payment within or without Bangladesh, of Bangladesh or foreign currency payable to bearer or to a banker on demand, but no such business shall be carried on or transacted without the previous approval of the Government,

(13A) the issue of its own negotiable securities on such rate of interest as the Bank may decide

(14)   (a) subject to sub-clause) the purchase and sale of securities of countries whose currency has been declared 23 approved foreign exchange with an unexpired currency of not more than ten years.

(b) the restrictions relating to maturity shall no apply to securities held by the Bank on the date on which this Order comes into force or any securities that may be received as assets including those transferred to and vested in the Dank under Article 5

(15) (a) the purchase and sale of securities of the Government, or of such securities of a Local Authority as may be specified in this behalf by the Government by notification in the Official Gazette on the recommendation of the Board

(b) securities, debentures and shares fully guaranteed as to principal and interest by the Goverment shall be deemed for the purpose of this clause to be securities of the Goverment

(c) the amount of such securities held at any time in the Banking Department shall be so regulated that the total value of such securities shall not exceed the aggregate amount of the capital of the Bank the Reserve Fund and four-fifths of the Liabilities of the Banking Department in respect of deposits

(16) the custody of monies, securities and other articles of value and the collection of the proceeds whether principal, Interest or devidends of any such securities.

BUSINESS AND FUNCTION OF THE BANK PART 1 । CHAPTER III । Bangladesh Bank Order,1972 

(17) the sale and realisation of all property, whether movable or immovable which may in any way come into the possession of the Bank in satisfaction, or part satisfaction of any of its claims

(18) the acting as agent to the Goverment, or any Local Authority in the transaction of any of the following kinds of business, namely

(a) the purchase and sale of gold or silver or approved foreign exchange

(b) the purchase, sale, transfer and custody of bills of exchange, securities or shares in any company

(c) the collection of the proceeds, whether principal, interest or dividends, or any securities or shares

(d) the remittance of such proceeds, at the risk of the principal, by bills of exchange payable either in Bangladesh or elsewhere

(e) and the management of public debt

(19) the purchase and sale of gold coin and gold or silver bullion

(20) the opening of and account with or the making of any agency arrangement with, and the acting as agent or correspondent of a bank incorporated in any country outside Bangladesh or the principal currency authority of any country under the law for the time being in force in that country or any international or regional bank formed by such principal currency authorities, and the investing of the funds of the Bank in the shares and securities of any such international or regional bank.

(21)    (a) subject of sub-clauses (b) and (c), the borrowing of money for purposes of the business or the bank and the giving of security for money so borrowed

(b) no money shall be borrowed under this clause form any person in Bangladesh other than a scheduled bank for a period exceeding three months and an amount not at any time exceeding the amount of the capital of the Bank

(c) no money shall be borrowed under this clause from any foreign national in or outside Bangladesh other than foreign and intemational banks, companies, Institutions or concems

(22) the making and issue of bank notes subject to the provisions of this Order

(23) the performance of the functions of the Bank under the International Financial Organisations Order, 1972

(24) establish credits and give guarantees

(25) the exercise of powers and functions and the performance of duties entrusted to the under this Order or under any other law for the time being in force and

(26) generally, the doing of all such matters and things as may be necessary, incidental to of Bank consequential upon the exercise of its powers or the discharge of its duties or functions under this Order

17. (1) Where, in the opinion of the Board or of the Governor, circumstances so warrant, the Bank may. notwithstanding any limitation contained in sub-clauses (a) and (b) of clause (2) or sub-clauses (a) and (b) of clause (3) or clause (4) of Article 16-

(a) purchase, sell or discount any of the bills of exchange or promissory notes specified in sub- clause (a) or sub-clause (b) of clause (2) or sub-clause (b) of clause (3) o Article 16 though such bill or promissory note does not bear the signature of a scheduled bank, or

(b) make advances or loans repayable on demand or on the expiry or fixed periods no exceeding ninety days against the various forms of security specified in clause (4) of Article 16 or against the security of goods or when the advance or loan is made to a banking company against such other form of security as the Bank may consider sufficient.

(2) Notwithstanding anything to the contained in any other law for the time being in force where a banking company, to which and advance or loan has been made order the provisions of sub clause (b) of clause (1) is wound up, any sum due to the Bank in respect of such advance or loan shall, subject only to the claims, if any, of any other banking company in respect of any prior claim or advance made by such banking company against any security, be a first charge on the assets of the baking company.

18.   On the recommendation of the Board the Government may, by notification in the Official gazette. declare the currency of any country to be such banking company to be approved foreign exchange for all or any of the purposes this Order.

BUSINESS AND FUNCTION OF THE BANK PART 1 । CHAPTER III । Bangladesh Bank Order,1972 

19. The Bank shall not, except as authorised under this Order-

(1) engage in trade or otherwise have a direct interest in any commercial, industrial or other undertaking except such interest as it may in any way ecquire in the course of the satisfaction of any of its claims, but all such interest shall be disposed of at the earliest possible moment.

(2) purchase the shares of any other bank or of any company or grant advances or loans upon the security of any such shares

(3) advance money on the mortgage, or otherwise on the security, of immovable property or documents of title relating thereto, except where such advance os made to any of its employees for building or purchasing a house for his personal use against the security or the house.

(4) become the owner of any immovable property except where ownership is necessary for the use of such property by the Bank, or for the residence, recreation or welfare of its employees

(5) make unsecured advances and loans and

(6) draw or accept bills payable otherwise than on demand.

20.     (1) The bank shall undertake to accept monies for account of the Goverment, and to make payments up to the amount standing to the credit of their accounts and to carry out its exchange, remittance and other banking operations, including the management of the public debt.

(2)      (a) The Government shall entrust the Bank, on such conditions as may be agreed upon between the Goverment and the Bank, with all their money, remittance, and banking transactions in Bangladesh, and, in particular, shall deposit free of interest all its balances with the Bank

(b) Nothing in this clause shall be deemed to prevent the Goverment from carrying on money transactions, at places where the Bank has no office, branch or agency or from holding at such places such balances as it may require.

(c) The Goverment shall entrust the Bank, on such conditions, as may be agreed upon

(3) In the event of any failure to reach agreement on the conditions referred to in this Article, the Government shall decide the conditions and its decision shall be final.

(4) Any agreement made under this Article shall be laid, as soon as may be after it is made. before the Legislature.

21. The Bank shall make public from time to time the standard rate at which it is prepared to buy or rediscount bills of exchange or other commercial paper eligible for purchase under this Order

22. The Bank shall sell to or buy from any authorised dealer in Bangladesh approved foreign exchange at such rates of exchange at such places and on such conditions as the Government may from time to time by general, or special order determine.

Explanation-In this Article “authorised dealer” means a person for the time being authorised under section 3 of the Foreign Exchange Regulation Act, 1947 to deal in foreign exchange.

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