Lesson 18 Pakistan Banking And Finance Services Commission Act, 1992-Banking and Finance-Handout, Exercises of Banking and Finance

Download Lesson 18 Pakistan Banking And Finance Services Commission Act, 1992-Banking and Finance-Handout and more Exercises Banking and Finance in PDF only on Docsity! LESSON 18 PAKISTAN BANKING AND FINANCE SERVICES COMMISSION ACT, 1992 THE CO-OPERATIVE SOCIETIES AND CO-OPERATIVE BANKS (REPAYMENT OF LOANS) ORDINANCE, 1966 Establishment of Federal Bank for Co-Operative and regulation of Co-Operative Banking Act, 1977 Federal Bank for Co-Operative and Regulation of Co-Operative Banking (Account) Rules PAKISTAN BANKING AND FINANCE SERVICES COMMISSION ACT, 1992 Object: The object and purpose of establishment of the commission was to promote merit and transparency in recruitment of bank officers through competitive examination and interview as well as conducting test for promotion, advice Federal Government on matters relating to requisite qualifications, methods of recruitment in officer grade-2 (OG-2) and higher grades in financial institutions. The commission was required to submit annual report to the President of Pakistan. In this Act we shall cover the following aspects/ statutory provisions:  Definitions  Establishment of the Commission  Salary, allowances and privileges  Term of office  Resignation and filling of vacancies  Functions of the Commission  Recruitment to posts in Financial Institutions  Funds of the Commission:  Appointment of officers, employees, etc  Report of the Commission  Power to amend Schedule  Act to override other laws  Power to make rules Definitions: the definitions as contained in the Act are given hereunder: “Commission” means the Pakistan Banking and Finance Services Commission established under section 3; "Financial institution" means an institution referred to in the Schedule; "Member" means a member of the Commission; "Recruitment" means initial appointment otherwise than by promotion or transfer; "Rules" means rules made under section 14; and (f)"schedule" means the schedule to this Act. Establishment of the Commission: Sec 3 There shall be established for the purposes of this Act a commission to be called the Pakistan Banking and Finance Services Commission and consisting of a Chairman and not more than four members appointed by the Federal Government. Salary, allowances and privileges: Sec 4 The Chairman and the Members shall be entitled to such salary, allowances and privileges as the Federal Government may determine from time to time Term of office: Sec 5 The Chairman and Members shall hold office for such term as may be determined by the Federal Government docsity.com Resignation and filling of vacancies: Sec 6 The Chairman or a Member may, by statement under his hand addressed to the Federal Government, resign his office. Any vacancy occurring in the membership of the Commission due to death, resignation or removal shall be filled by the appointment of another person by the Federal Government. Functions of the Commission: Sec 7 The functions of the Commission shall be— to conduct open competitive examinations for recruitment to Grade III or higher posts in the financial institutions; to conduct interviews and tests for recruitment to posts in grades higher than Grade III, except where such recruitment is excluded from the purview of the Commission by the Federal Government; to conduct tests for promotion of existing employees from lower cadres to Grade III and above, if so required by a financial institution; and to advise the Federal Government on matters relating to qualifications for, and methods of recruitment to, posts in Grade II or higher grades in the financial institutions, if so required by the Federal Government Recruitment to posts in Financial Institutions: Sec 8: Recruitment to all posts in Grade iii or higher grades in a financial institution shall be made on the advice of the Commission: Provided that the Commission may, on the direction of the Federal Government advise any financial institution for recruitment in any post or grade The Commission may exempt any professional or class of professionals, like engineers, lawyers and chartered accountants, from appearing in any written test or examination conducted by the Commission. A financial institution shall not disregard, or act contrary to, the advice of the Commission without the prior approval of the Federal Government, and where the Federal Government grants such approval it shall record its reasons for doing so. Funds of the Commission: Sec 9 There shall be constituted for the Commission a fund to which shall be credited all sums received under sub-section (2) and out of which shall be defrayed all expenditure incurred by the Commission, including expenditure on the emoluments of the Chairman and members and the officers, employees, experts. And consultants of the Commission Every financial institution shall make to the Commission such payments to defray its expenses as the Commission may, with the approval of the Federal Government, demand Appointment of officers, employees, etc: Sec 10 For the efficient performance of its functions, the Commission may appoint its officers, employees, experts and consultants on such terms and conditions as may be prescribed. Report of the Commission: Sec 11 The Commission will submit to the President annually a report on the work done by the Commission. Power to amend Schedule: Sec 12 The Federal Government may, keeping in view the purposes of this Act, by notification in the official Gazette, amend the Schedule so as to add any entry thereto or omit or modify any entry therein. Act to override other laws: Sec 13 The provisions of this Act shall have effect notwithstanding anything contained in any other law, or in any instrument, deed or other documents relating to a financial institution. Power to make rules: Sec 14 The Commission may, with the approval of the Federal Government, by notification in the official Gazette, make rules, for carrying out the purposes of this Act. Since the scenario in the banking sector has undergone, transformation and shifted from governmental control and nationalization to a privatized sector. Hence designing and implementing the recruitment policies of the respected banks is now the sole prerogative of the docsity.com notice to be issued to the co-operative society, or the co-operative bank, as the case may be, and in the case of a benami loan, to the alleged beneficiary, and shall, after making such inquiry as he may consider necessary and giving the parties a reasonable opportunity of being heard, decide the matter. Securing and repayment of loans: Sec 7 Within thirty days of the service of the notice under section 5, in a case where the borrower does not deny the loan or the liability arising there from, and in other cases, within thirty days of the decision of the Registrar or the Assistant Registrar, as the case may be, under section 6, the borrower and his surety shall— secure the loan or the liability arising there from by mortgage, pledge, hypothecation or assignment of such property of the borrower or his surety or of both as in the case of a loan not exceeding five hundred thousand rupees, the Assistant Registrar, and in the case of a loan exceeding five hundred thousand rupees, the Registrar, may think adequate; and repay the loan after thirty days of the service of notice under section 5 when he does not deny the loan or the liability arising there from, and in any other case, after thirty days of the decision of the Registrar or the Assistant Registrar, as the case may be, in eight months in four equal installments, the first installment being due on the day immediately succeeding the one month period of notice or, as the case may be, the decision of the Registrar or the Assistant Registrar specified above. Recovery of loans: Sec 8: If the amount of any loan or any part thereof to be repaid in accordance with the provisions of section 7 is not paid within the period or the periods specified in the said section, the same may, without prejudice to the provisions of section 10, be recovered according to the law and under the rules for the time being in force for the recovery of arrears of land revenue.] Where the borrower is a firm, partnership, company or other association of persons (not being a company registered under the Companies Act, 1913, the liability of the members whereof is limited), the loan or any part thereof due from such borrower may be recovered from the assets of such firm, partnership, company or other association of persons, as the case may be, or from the members or partners thereof. Restrictions on registration of documents: Sec 8-A Notwithstanding anything contained in any other law for the time being in force no registering officer shall register any document relating to property, which is required to be registered under the provisions of clause (a), (b), (c) or (e) of section 17 of the Registration Act, 1908 ,or which is produced before him for voluntary registration, nor shall any Revenue Officer on the basis of any such document effect any mutation in the record of rights under the provisions of any law for the time being in force, unless— (1) (a) the person whose right, title or interest in the property is or will be transferred, assigned, limited or extinguished under the terms of the document or on the basis of the mutation in the record of rights, as the case may be, furnishes an affidavit to the registering officer or the revenue officer, as the case may be, to the effect that he does not owe any loan, whether due immediately or on a future date, to a co-operative society or a cooperative bank; or (b) where such person owes a loan to a co-operative society or a co-operative bank, whether due immediately or on a future date, it is certified by the Registrar where the loan owed by such person exceeds rupees five hundred thousand, and by the Assistant Registrar where the loan owed by such person does not exceed rupees five hundred thousand, that either satisfactory arrangements have been made for the repayment of the loan or that the loan has been secured in accordance with the provisions of section 7. Where an application is made to the Registrar or an Assistant Registrar, as the case may be, for issuing a certificate under the provisions of sub-section (1), he shall not refuse to issue the certificate unless he has first given the applicant an opportunity of being heard and adducing evidence to show that either satisfactory arrangements have been made for the repayment of the loan owed by the applicant or that the loan has been secured in accordance with the provisions of section 7. An order made by the Registrar or an Assistant Registrar under sub-section (2) refusing to issue a certificate, shall be final and not open to question in any manner. docsity.com Restrictions on alienations: Sec 8-B Where any person owing a loan, whether due immediately or on a future date, to a co-operative society or a co-operative bank has, on or after the twenty-seventh day of April, 1966, alienated any immovable property, by sale, exchange, gift, mortgage or will, otherwise than by or under an order or decree of a Civil, Revenue or Criminal Court, which alienation is fraudulent with intent to defeat the claim of a co-operative society or a co-operative bank, such alienation shall not operate to transfer any right, title or interest in the property of the debtor, unless— a. The loan due from the debtor has been repaid; or b. It is certified by the Registrar, where the loan exceeds rupees [five hundred thousand], and by the Assistant Registrar, where the loan does not exceed rupees [five hundred thousand], that either satisfactory arrangements have been made for the repayment of the loan or that the loan has been secured in accordance with the provisions of section 7. An alienation of immovable property shall be deemed to be fraudulent with intent to defeat the claim of a co-operative society or a co-operative bank for the purposes of sub-section (1), if the Registrar, after giving the person by whom the alienation has been made, and the person or persons in whose favor the alienation has been made an opportunity of being heard, issues a declaration to the effect that the alienation is fraudulent with intent to defeat the claim of a co-operative society or a co-operative bank. Any party aggrieved by a decision made by the Registrar under sub-section (2) may prefer an appeal to Government against such decision, and the order made by Government, on such appeal passed after giving an opportunity of being heard to the appellant shall be final and shall not be open to question in any manner. Power of Registrar when making inquiry: Sec 9 The Registrar or the Assistant Registrar, as the case may be, shall, for the purpose of making any inquiry under this Ordinance, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (Act V of 1908), when trying a suit, in respect of the following matters, namely:- (a)Summoning and enforcing the attendance of any person and examining him on oath; (b) Requiring the discovery or production of any document; (c) Requisitioning any public record from any Court or office; (d) Issuing commissions for the examination of witnesses; (e)Appointing guardians or next friends of persons who are minors or of unsound mind; (g) Adding legal representatives of deceased borrowers or sureties; (h) Substituting the names of rightful parties, including the beneficiaries of benami loans; Consolidation of cases; (i) Any other matter which may be prescribed by rules made under section 12; and (j)Enforcing any order made by him under the provisions of this Ordinance or the rules framed there under. Penalty: Sec 10 Whoever contravenes any of the provisions of this Ordinance or the rules made there under shall be punishable with imprisonment for a term which may extend to seven years, or with fine, which, in the case of default in the repayment of a loan, shall not be less than one-fourth of the amount of the loan outstanding against him, or with both. Procedure: Sec 11 (1) No Court shall take cognizance of any offence under this Ordinance except on a complaint in writing made by the Registrar or an Assistant Registrar, or by a person duly authorized by the Registrar or Assistant Registrar. (2)Notwithstanding anything to the contrary contained in the Code of Criminal Procedure, 1898, the provisions of Chapter XX of the said Code shall apply to the trial of cases under this Ordinance.] Power to make rules: Sec 12 Government may, by notification in the official Gazette, make rules, to carry out the purposes of this Ordinance. docsity.com Bar of Jurisdiction: Sec 13 No Court or other authority shall have jurisdiction— (a). To entertain or adjudicate upon any matter which [Government, the Registrar] or the Assistant Registrar is empowered by or under this Ordinance or the rules framed there under to dispose of or determine; or (b). To question the legality or validity of anything done under this Ordinance or the rules framed there under by [Government, the Registrar] or Assistant Registrar. No Court or other authority shall be competent to grant an injunction or other order in relation to any proceedings before the Registrar or the Assistant Registrar, or anything done or to be done by or at the instance of the Registrar or the Assistant Registrar under this Ordinance or the rules framed there under. From the above, we understand that provision of law is a very important aspect of the cooperative banking but at the same time recovery of the loan disbursed is equally important. The above statutory provisions provide a legal framework for recovery granted by cooperative banks. Establishment of Federal Bank for Co-Operative and regulation of Co-Operative Banking Act, 1977 This Act may be called the establishment of the Federal Bank for Co-Operative and regulation of Co- operative Banking Act, 1977. It extends to the whole of Pakistan and also applies to the business of the Bank transacted outside Pakistan and to persons conducting such business. It shall come into force at once and shall be deemed to have taken effect on the 9th day of October, 1976. In this Act we shall cover the following aspects/ statutory provisions: Definition: “ Approved securities” means securities in which a trustee may invest money under clause (a), clause (b), clause (bb), clause (c) or clause (d) of section 20 of the Trusts Act, 1882, and such other securities as the Federal Government may, by notification in the official Gazette, declare to be approved securities for purposes of this Act; “Bank” means the Federal Bank for Co-operatives established under section 5; “Board” means the Board of Directors constituted under section 9; “Chairman” means the Chairman of the Board; “Co-operative bank” means a banking society as defined in the Explanation to the sub-section (2) of section 7 of the Co-operative Societies Act, 1925, other than a provincial Co-operative Bank; “Co-operative society” means a society registered in Pakistan under any law for the time being in force relating to registration of co-operative societies and a “primary co-operative society” means such a society of which no other society is a member; “Borrower” means a person who has obtained a loan from the Bank of a Provincial Co-operative Bank and includes a surety or an indemnifier, but does not include the Federal Government or a Provincial Government. “Demand Liabilities” means liabilities which are to be met on demand and “time liabilities” means liabilities which are not demand liabilities; “Director” means a Director for the time being of the Board; "District Judge” in respect of areas where a District Judge does not have unlimited pecuniary jurisdiction in original civil suits, a high Court exercising original civil jurisdiction; “Family members” in relation to a person means his spouse, dependent lineal ascendants and descendants and dependent brothers and sisters; “Loans, advances and credit” includes finance as defined in the Banking Tribunals Ordinance, 1984, and all cognate expressions shall be construed accordingly: “Managing Director” means Managing Director of the Bank and includes any person for the time being discharging the functions of the Managing Director” “Multi-unit co-operative society” means a co-operative society to which the multi-Unit Co-operative Societies Act, 1942 applies “Prescribed” means prescribed by rules; “Provincial Co-operative Bank” means a co-operative society the primary object of which is to make loans to the co-operative societies which are its members and which is notified, for the purposes of this Act, docsity.com