Bank Company Act, 1991

(Amended up to 2013)

Md. Mofizur Rahman K. Chowdhury, CFA, FCMA

Deputy General Manager
Bangladesh Bank Training Academy
 BCA 1991 Brief History :
• The Banking Companies Ordinance, 1962 was inherited in 1972
• Bank Company Ain, 1991, in Bangla, was promulgated w.e.f. 24
February 1991
• Seven Amendments made thereafter (in 1993, 1995, 1997, 2001,
2003, 2013, 2015 and 2018)
• Amendment done in 2007 was not ratified by the Parliament
 Objective of the Act

• Provides a legal framework for regulating and

supervising the banking companies in Bangladesh
• Defines the business of a banking company and
lays down the manner in which such business is to
be transacted
• Vests Bangladesh Bank (BB) with powers to grant
license, conduct inspection, regulate and
supervise the activities of banking companies
including the branches of foreign banks.
 Limitations
• Provisions of BCA are applicable to Banking
Companies, in addition to and not in derogation
of the Companies Act. In the event of any conflict,
BCA being a special Act for banking business,
prevails over the provisions of Companies Act and
other legislations.
• The Act has limited applications to Co-operative
Societies and other Financial Institutions which
may, in terms of their own laws, accept deposits
and lend money which are primarily banking
operations.
 Different Parts of the Act
• Preliminary (Part I) : Section 1-6
• Business of Banking Companies (Part II): Section 7-50
• Illegal banking transactions by companies (Part III): Section 51-56
• Prohibitions of certain activities relating to banking business (Part
IV) : Section 57
• Acquisition of the undertaking banking companies (Part V) : Section
58-63
• Suspension of business and winding up of banking companies (Part
VI) : Section 64-77
• Speedy disposal of winding up proceedings (Part VII) : Section 78-
100
• Miscellaneous provisions (Part VIII) : Section 101-123
 Preliminary (Part I)
• [Section 1-6] This part covers the limitations, supremacy, definitions,
applicability of the Act.
• Section 3 of the BCA:
– waives the application of the BCA on co-operative banks (in case of taking
unauthorized deposit from non-member, section 44 & 45 will be applicable)
– waives the application of the BCA on micro-credit institutions
– waives the application of BCA on NBFIs (however, section 17(6), 27A & 27AA
are applicable)
– empowers BB to inspect and instruct subsidiaries of banking companies if
deemed necessary.

6
 Preliminary (Part I)

• Section 4 omitted: Government’s power to exempt the provisions of

BCA.
• Section 5: defines various terms used in the Act
– Default Borrower: a debtor person or an entity or a company or a related entity,
loan or any other financial facilities provided to whom or part of it or its interest
or profit on it is passed 6 months after it becomes overdue as per definition of
Bangladesh Bank.
– Related Entity is explained as: if a person or an entity or a company, as it applies
to it, is not director of other entity or he/it does not hold shares 20% or more of
that entity, or is not a guarantor of that entity, then that entity will not be
considered as his/its related entity.
– The definition of default borrower widened to include guarantor in case the
principal borrower defaults.
– Debtors include guarantor according to 2013 amendments.
• Section 6: provides the Act overriding effect on the Memorandum and
Article of Association of a bank or any agreement/document
7
 Business of Banking Companies (Part II)
• Section 7-50: This part covers matters that are relevant for
supervision and regulation of Banking Companies.
• Section 7: lays down the activities in which banking companies may
engage
– Sub-section (3) prohibits banks from engaging in capital market related
business without forming a subsidiary.

8
 Business of Banking Companies (Part II)
• Section 8: restricts the usage of the word ‘Bank’ and ‘Bank’
related words.
– No company or institution other than a banking company shall use
the words ‘bank’ or its part to their name. Exception-
• Subsidiaries of banking company,
• Association of banks interest
• Any company owned partly or fully by Government and notified
through the official Gazette
• Sections 9: prohibits banking companies from carrying out
trading activities (excepting Islami banks)
9
 Business of Banking Companies (Part II)
• Sections 10: prohibit banking companies from holding immovable
properties (except for their own use)
– If such property acquired in any way it must be disposed off within seven
years.
– Bangladesh Bank may extend the time for a period up to five years.
• Section 11: Prohibition of employment of Managing Agents and
restriction on certain forms of employment
– A bank company -
• shall not employ or be managed by a Managing Agent
• shall not employ a person or continue employment of a person adjudicated insolvent,
convicted by a criminal court, receives remuneration or part of remuneration as
commission or as percentage of profit of the company or the remuneration, as
Bangladesh Bank’s opinion, is excessive
• shall not be managed by a person who is engaged in any other business, a director of
subsidiary of that bank-company 10
 Excessive Remuneration
• While determining Excessive Remuneration BB may
consider:
a) the financial solvency of the banking company, the extension of
its activities, the size of its business and the general tendency of its
earning capacity;
b) the number of its branches and offices;
c) the competency, age and experience of the person receiving the
remuneration;
d) the amount of the remuneration given to any other person
employed in the banking company or to persons employed in similar
positions in other banking companies in about the same condition;
e) the interest of its depositors;
 Section 11: Removal Convicted CEO and Director
• Where a person holding the office of a chairman, director, manager
or chief executive officer, by whatever name called, of a banking
company is found by any court or tribunal or other authority to have
contravened the provision of any law and the Bangladesh Bank is
satisfied that the contravention is of such a nature that the
association of such person with the banking company will be
detrimental to the interests of the banking company or its depositors
or otherwise undesirable, Bangladesh Bank may make an order, after
giving opportunity to express his/her opinion, that person shall cease
to hold the office with effect from such date as may be specified
therein. BB order may specify the time for which such person will not
be eligible for re-appointment as CEO or Director without BB’s
permission for a time period of maximum 5 years.
 Business of Banking Companies (Part II)
• Section 12: Restrictions on removal of banking documents
– No Banking shall remove its records (including electronic forms) and work
process to outside of the country without permission of Bangladesh Bank.
• Section 13: relates to maintenance of regulatory capital:
– banks are required to maintain capital as laid down and defined in BB's
guidelines (Basel Accord)
– government in consultation with Bangladesh Bank may exempt the
specialized banks
– Bangladesh Bank to set minimum capital requirement for start-up and to
continue banking business
– failure to comply with capital requirements may result in heavy fine,
restrictions on new deposits, credits, or branches/business centers, etc.
– BB may apply to court for wind up the bank company under section 64(3)
13
 Business of Banking Companies (Part II)
• Section 14: regulates voting rights of shareholders
– regulations of paid up capital, subscribed capital authorized
capital
– capital of a bank-company to consists of ordinary shares only
– voting rights of shareholders, excepting the government, not more
than 5% irrespective of shareholding
• Section 14A: says that shares of a bank shall not be
concentrated; any person, company or members of a family
can not buy more that ten percent share of a bank either
individually or jointly or both. Violation of the section may
result in forfeiture of those shares.
• Section 14B: says that no person, institution, or company,
alone or in concert with another person, shall become a
significant shareholder in a bank (more than 5%) without
prior authorization from the BB. 14
 Business of Banking Companies (Part II)
• Section 15: regulates the appointment of directors and chief
executive officer:
– Sub-section (4): Every banking company other than specialized banks, shall
obtain approval of BB before appointing and/or removing a director,
managing director from his post.
– Sub-Section (6): No person shall qualify for appointment as director or
managing director of a banking company if he does not fulfill the ‘fit-and-
proper’ criteria.
– Sub-section (9): From 22 July 2014 onwards, no banking company shall have
more than 20 directors including 3 independent directors; however, if the
number of directors is less than 20, the banking company may have 2
independent directors.
– Sub-section (10): From 22 July 2014 onwards, no banking company shall have
more than four directors from a single family.
15
 Business of Banking Companies (Part II)
• Section 15AA(1): The term of the office of the
Director of a banking company shall be three years. A
director shall not hold office for more than three
consecutive terms.
• Section 15AA(2): A director serving two consecutive
terms will be ineligible for re-appointment to the
banking company for the next three years.

16
 Business of Banking Companies (Part II)
• Section 15B: Role of the Board-
– The board of directors shall be responsible for
establishing policies for the banking company, for risk
management, internal controls, internal audit and
compliance and for ensuring their implementation.
– Each bank shall establish an Audit Committee, the
members of which are selected from among the members
who are not in the executive committee of the board.
– Each bank shall establish a Risk Management Committee
made up of directors of the bank. 17
 Business of Banking Companies (Part II)
• Section 15C: Internal Audit and Control-
– The board of directors of a bank-company shall cause the bank to establish an
effective internal audit and control system. The internal audit system shall be
operated independently of management and its reports are to be presented
to the Audit Committee.
– The internal auditor shall be given meaningful access to management and
members of management to discuss matters relevant to their functions and
shall have the right, upon request, to obtain from them any information or
documentation which he or she shall require.
– The persons engaged in internal audit functions shall not simultaneously hold
any position of authority to bind or represent any bank in contracts or other
transactions.

18
 Business of Banking Companies (Part II)
• Section 17: If any director of a banking company fails to
repay any loan and such failure continues for two months
after being notified in writing, his post will fall vacant. He or
she shall not transfer the shares until the amount due is
completely paid off.
• Section 18: Transactions with director, managing director,
and bank officials:
– Sub-section (2) A director, managing director, and senior managers
two tiers below MD shall provide annually to the board particulars
of all commercial, financial, agricultural, industrial or other
business or family interests.
– Sub-section (3): Disclose material relationship with any party
having a significant contract or a proposed significant contract
19

with the banking company.

 Business of Banking Companies (Part II)
– Sub-section (4): When a matter related to a director comes up at a
board meeting, he shall notify at once, leave the meeting and do
not vote on that matter, his presence shall not be counted for
quorum.
– Sub-section (6): If a person fails to disclose an interest or a
material relationship, a court of competent jurisdiction may set
aside the contract. In addition, BB may suspend such person from
office for maximum one year.
• Section 22 (Restriction on dividend declaration): No bank company
(except specialized bank) can declare dividend, unless:
– written-off all preliminary expenses which were capitalized
– maintain capital and reserves according to Section 13 20
 Business of Banking Companies (Part II)
• Section 23: A bank director shall not remain a director of another
banking company or financial institution. Exception-
– He/she can remain director of an insurance company for a
maximum of two terms (from 22 July 2013).
– in case of a director of a specialized bank appointed by the
Government the prohibition shall not apply
• Section 24 : relates to Statutory Reserve, to be created by banks setting
aside 20% of their un-appropriated profits each year.
• Section 25: relates to cash reserves for non-scheduled banks.
• Section 26: relates to formation of subsidiary companies of banks.
Provision for Security Trading Companies added.

21
 Business of Banking Companies (Part II)
• Section 26A: put restrictions on capital market
exposure:
– exposure to a single company up-to 5% of bank's paid up
capital, share premium, statutory reserves and retained
earning [earlier 10%]
– exposure to a single company up-to 10% of respective
company's share capital [earlier 30%], and
– overall portfolio exposure up-to 25% of bank's paid up
capital, share premium, statutory reserves and retained
earning (to be complied within next 3 years). [Earlier this
was 10% of total liabilities.]
– failure to comply with restrictions may result in heavy
fine. 22
 Business of Banking Companies (Part II)

• Section 26B: General restrictions on credit exposure:

– Single borrower exposure limit to be determined by BB, but
cannot exceed 25% of regulatory capital.
– Total Large Loan Exposure limit to be determined by Bangladesh
Bank.
• Section 26C: Transactions with Bank-Related Persons-
– No bank shall enter into a transaction with a bank-related person
on favorable terms and conditions compared to normal clients.
– Aggregate amount outstanding on all exposures to bank-related
persons would not exceed 10 percent of Tier 1 capital.
– Exposures provided to a bank-related person are subject to prior
approval of the board of directors, except cases exempted by BB.
23
 Business of Banking Companies (Part II)
– If an exposure is provided by a bank in violation of above provisions, such
exposure must be immediately repaid, and the board members shall be hold
liable.
– Exposure to bank-related persons shall be subject to additional conditions, if
any, prescribed by Bangladesh Bank.
• Bank-related person means-
– any director, managing director or chief executive officer of the bank and any
significant shareholder of the bank;
– any person who is related to a director, managing director or chief executive
officer or significant shareholder of the bank by marriage;
– any entity in which a director or significant shareholder of the bank is also a
director or significant shareholder;
– any person that has a significant interest in an entity in which the bank has a
significant interest. 24
 Business of Banking Companies (Part II)
• Section 27(1): No bank shall make any loans or advances,
issue guarantees, or provide any other financial facilities
against the security of its own shares; or grant any kind
loans or advances other than a “secured loan or advance” to
any of its directors, or grant unsecured loans or advances to,
or make loans and advances to any of the family members
[and their companies] of any of its directors.
• Section 27A: Director of any debtor company cannot resign
or sell own shares without approval of one step higher of
sanctioning authority of the respective bank.
25
 Business of Banking Companies (Part II)
• Section 27AA: List of defaulter borrower to be sent to BB; and no
loan facility to be given to any defaulter borrower.
• Section 28: put restriction on waiving loans and advances to its
directors, family members of directors and their related company
without prior approval of BB.
• Section 29: provides power to Bangladesh Bank to control advances
by banking companies
– Credit ceiling , Ratio between total advance and small advance
– Purpose of advance
– Maximum limit for any banking company or any person or group
– Securities and margin of advance.
– The rates of interest on advance
26
 Business of Banking Companies (Part II)

• Section 31: provides power to BB regarding

licensing of banking companies
– No individual, institution or company shall carry
out the banking business without license from BB
– BB may impose any condition at the time of issuing
license
– BB can cancel the license for some reasons
– Appeal to BOD of BB for reconsideration with in the
30 days (earlier it was govt.) 27
 Business of Banking Companies (Part II)
• Section 32: relates to restrictions on opening of a new and
transfer of existing place of business without BB’s
permission
• Section 33: describes the maintenance of liquid assets by
the scheduled banks
• Section 35: deals with handling of unclaimed deposits and
valuable articles. Holding period in BB increased from one
year to two years.
• Section 36: a statement of assets and liabilities have to send
BB quarterly basis.
• Section 38: Banks are to prepare accounts and balance
sheet following a calendar year. [Banks shall comply with
the standards set under Section 40 of FRA 2015; BB shall not
accept reports from auditors other than listed by FRC.] 28
 Business of Banking Companies (Part II)
• Section 39(3): Duties and responsibilities of external auditor:
– Certify whether financial statement has been prepared in
accordance with the Bangladesh Accounting Standards and
standards prescribed by Bangladesh Bank for this purpose.
– Review the adequacy of the practices and procedures for internal
audit, internal controls, and risk management and make
recommendations for remediation.
– Inform about any fraudulent activity by bank employee or its
affiliates or any irregularity or deficiency in its administration or
operations that may result in a material loss
– Whether the subsidiary company or companies have been duly
audited and whether financial statements of the subsidiary(s) 29
 Business of Banking Companies (Part II)
• Section 39(5):An auditor appointed by a bank may at no
time provide any service other than audit services or any
other functions that BB may permit. Also, the external
auditor of a bank, or any member of the audit firm shall not
be a bank related person or an agent or representative of
the bank and shall not have any financial interest in the
bank, with the exception of holding a deposit in the bank.
• Section 39(6): The Bangladesh Bank shall prescribe by
regulation a requirement for rotation of auditors or
engagement partners of audit firms after a specified period
of time 30
 Business of Banking Companies (Part II)
• Section 39A: Special Audit on the activities of a banking-
company can be conducted by BB if deemed necessary.
• Section 40: Submission of the audited annual report to BB
within two month after ending of the year. BB can grant two
more months if approached.
• Section 42: Every banking company shall publish, in one
national daily newspaper in Bangla and one in English, its
last audited balance sheet and profit and loss account
within one week from the date of submission of the same to
the BB. These statements shall also be posted in the website
of the banking company. 31
 Business of Banking Companies (Part II)
• Section 44: empowers BB to inspect any banking-company and its
books and accounts:
– Government’s power to instruct BB to conduct inspection and impose
sanction on banks done away with
– Banking-company includes all Branches and Subsidiaries
– Based on inspection report, BB may order in written to bank
• Prohibit taking deposit
• Apply for winding up under section 64
• Any such order to protect depositors interest
• Section 45: empowers BB issue direction to a banking company in
public interest, for monetary or banking policy, protect the interest of
the depositors, etc.
32
 Business of Banking Companies (Part II)
• Section 46: empowers BB, to remove Chairman, Director or
Chief Executive Officer from a bank by an order in writing
– a reasonable opportunity of making a representation to the
Bangladesh Bank against the proposed order shall be given
– Such person shall cease to be a chairman or, director or, chief
executive and shall not in any way be concerned with, or take part
in, the management of the bank or any other bank for such period
not exceeding three years as may be specified by BB
– This section shall not apply to the case of chairman or director, by
whatever name called, nominated or appointed by the
Government. However, the Government would sincerely consider
any adverse report made by BB on the conducts of such persons. 33
 Business of Banking Companies (Part II)
• Section 47: BB has the power to dissolve the Board of a
banking company and appoint a person to carry out the
functions of the Board for a period which may extend to two
years.
• Section 48: Limitation
– No other person, except the Governor, can give the order under
Section 46 and 47, based on a report by a standing committee set
up by the Bangladesh Bank for the purpose
– Aggrieved person may appeal to BOD, decision of BOD is final
– Actions taken under this section or section 46 or section 47 shall
not be called in question by or before any court, tribunal or other
authority 34
 Business of Banking Companies (Part II)
• Section 49: relates to additional power to BB on the issues
like:
– warn a bank against entering into any particular
transaction
– help the bank in amalgamation
– require to call a meeting of directors
– appoint observers in the board
– Impose changes in the management as deemed
necessary
– Instruction regarding payment systems and loan
classification
35
 Illegal banking transactions by companies (Part III)
• [Section 51-56:] Where it appears to Bangladesh Bank that a
company or any other person is transacting banking business
without license in contravention of section 31, the
Bangladesh Bank may
– direct the company or such other person to submit all information,
documents or records within their knowledge, possession related to
their business
– authorize any person to enter and search any place of such
company or person
– inspect or examine any of the books, accounts, documents or
records
– take steps for its winding up. 36
 Prohibitions of certain activities relating to
banking business (Part IV)
• Section 57: defines punishment for certain activities
in relation to banking companies, such as:
– obstruct any person from lawful entering to a bank
– hold any demonstration which is violent or which
prevents normal business of a bank
– act that undermine the confidence of the depositors
• The offence is punishable with imprisonment for a
term which may extend to two years, or with fine
which may extended to two lac taka or with both.
37
 Acquisition of the undertaking banking companies
(Part V)
• [Section 58-63:] A Banking Company may be acquired if it fails to
comply with the direction issued by BB, or it is managed in a
manner detrimental to the interest of the depositors or banking
policy or it is desirable for better provision of credit generally or to
a particular area, to acquire the undertaking.
• BB is required to submit a report to the Government and the
Government may by notification in the official gazette, acquire the
said undertaking.
• After such acquisition the Government may under a scheme drawn
by it vest the assets and liabilities of such an undertaking in a
company.
38
 Suspension of business and winding up of banking
companies (Part VI)
• [Section 64-77:] Application for winding up of a banking
company may be made by BB suo-moto if the bank is
unable to pay its debt
• Application for winding up can also be made if the banking
company has not been able to comply with
– the requirement of paid up capital
– become disentitled for a license, has been prohibited from
receiving fresh deposit
– having failed to comply with the provisions of the Act
39
 Suspension of business and winding up of banking
companies (Part VI)
• In voluntary winding up, the bank is required to obtain a
certificate from BB that it is able to pay all its debts
• Payment to depositors: In case of liquidation of banks,
liability will be settled according to the provisions of Deposit
Insurance Act 2000, and Deposit Insurance Rules.
• Moratorium, Reconstruction or Amalgamation of banks:
New provision allowing for voluntary amalgamation with
another bank or FI, or reconstruction by selling a part to
another bank or FI has been enacted.

40
 Speedy disposal of winding up proceedings (Part
VII)
• [Section 78-100:] These sections provide High Court
Division exclusive jurisdiction to entertain and decide
on:
– the winding up of the banking company or before or after
the commencement of this Act
– any claim made by or against a banking company which is
being wound up
• Public examination of directors/auditor where any
loss has been caused to the bank by any act or
omission of any director or auditor 41
 Miscellaneous provisions (Part VIII)
• [Section 101-123:] Miscellaneous
• Section 103: relates to nomination of one or more persons
for payment of depositors money and valuables, in case of
death.
• Section 104: No person other than the depositor has any
claim on deposit, except appropriate court’s order.
• Section 109: deals with penalties to be awarded for
contravention of statutory provisions or failure to comply
with the direction/instructions issued by BB.
• Section 110: says that chairman, director, auditor, liquidator
and employees of bank-companies are Public Servant.
42
 Miscellaneous provisions (Part VIII)

• Section 109 imposes Penalties for violation of this act:

(1) Carrying on banking business without license- 7 years imprisonment and a fine of 2-
20 lac taka
(2) Providing false statement or not submitting statement which are required or
demanded under this law - 3 years imprisonment and a fine of 1 lac taka
(3) Extension of loan in contravention to section 27(1) & 27(2) - 3 years imprisonment
and a fine of 10 lac taka
(4) Refusing to submit documents or statements or information, or allow examination of
documents related to business of the bank etc. violating section 44(2)- a fine of taka 1o
thousand to taka 1 lac
(5) If any deposits are received by a banking company in contravention of an order
under clause a) of section 44(5), every director or officer of the banking company
responsible for the receiving of such deposits shall be deemed culpable of the
contravention and shall be punishable with a fine which may extend to twice the
amount of the deposits so received.
 Miscellaneous provisions (Part VIII)
• Section 112: enumerates the process to follow when taking
disciplinary measures against a bank-company:
– Serve a show-cause notice
– Conduct inspection if deemed necessary
– Instruct the bank to deposit penalty amount, if not paid within 14 days, BB
can deduct the amount from its account with BB
• Section 115: No company, institution, person can accept checking
deposits without permission from Government/BB.
• Section 121: empowers BB, in consultation with Government, to
exempt any banking company or any class of banking companies
from any or all of the provisions of this Act.

44
Bank Resolution Policy and BCA
Bank Supervision and BCA
 Areas of supervision
– Bank Management
– Capital
– Shareholding
– Dividend
– Directorship
– Loan Management
– Depositors Interest
 Bank Supervision and BCA
• BB is authorized to issue and revoke license under
section 31 of BCA.
• Section 44 confers Bangladesh Bank to carry out
inspection on any bank at any time and examine the
books of account.
• Section 45 provides BB power to give directions
 Bank Supervision and BCA
• Section 31, 44 and 45 has common objective:
a) Save public interest, or
b) improvement of the monetary policy or banking policy, or
c) prevent the affairs of any banking company being conducted in a manner
detrimental to the interests of the depositors or in a manner prejudicial
to the interests of the banking company; or
d) secure the proper management of any banking company,

In addition, as the power of cancellation of license, order to

stop/suspension of business and removal of directorship is vested to BB
under section 31, 44, 45, 46, 48, 64 BB is required to monitor whether
any reason occurred that trigger to exercise such power.
 Revocation of License : Section 31
• Bangladesh Bank may cancel a license of a banking
company if :
– the company at any time fails to comply with any of the
conditions imposed upon it as the licensing criteria under
sub-section (2);
– the company fails to meet the condition that:
• the company is or will be in a position to pay the claims of its
present or future depositors in full;
• the affairs of the company are not being or are not likely to be
conducted in a manner detrimental to the interests of its
present or future depositors.
 Bank Inspection: Section 44
• Bangladesh Bank may at any time, by one or
more of its officers, examine in detail the
ledgers and accounts of any banking company.
based on the inspection if BB is in the opinion that the affairs
of the company are being conducted in a manner
detrimental to the interests of its depositors, then BB, in
writing order:
– may prohibit the banking company from taking fresh deposits;
– May apply under section 66 for the winding up of the banking company
– May take any decision as it think necessary to protect the interest of the depositors
 Power of the Bangladesh Bank to give directions:
Section 45
Where Bangladesh Bank is satisfied that
a) in the public interest, or
b) to provide for the improvement of the monetary policy or banking policy,
or
c) to prevent the affairs of any banking company being conducted in a
manner detrimental to the interests of the depositors or in a manner
prejudicial to the interests of the banking company; or
d) to secure the proper management of any banking company,

it is necessary to issue directions to banking companies generally or to any

banking company in particular, it may issue such direction as it deems fit;
and the banking company concerned shall be bound to comply with such
direction.
 Acquisition of Banking Company
Section 58 If, upon receipt of a report from the Bangladesh Bank, the Government
is satisfied that a banking company
a) has, on more than one occasion, failed to comply with the directions given to it
in
writing under section 29 or section 45, in so far as such directions relate to banking
policy, or
b) is being managed in a manner detrimental to the interests of its depositors, and
i) for the interest of the depositors of such banking company, or
ii) for the interest of banking policy, or
iii) for the better provision of credit generally or of credit in any particular area,
It is necessary to acquire the banking company or one or more branches of or
any subsidiary such banking company, the Government may, after consultation
with the Bangladesh Bank, acquire the entire banking company or any of its
branch as it thinks fit and vest to any banking company or a new banking
company.
 Bank Resolution Policy and BCA
64. Suspension
(4) Where the Bangladesh Bank is satisfied that the affairs of a
banking company in respect of which an order under
subsection (1) has been made, are being conducted in a
manner detrimental to the interests of its depositors, it may
make an application to the High Court Division for the
winding up of that banking company, and where such
application has been made, the High Court Division shall
not extend the period of an order to stay proceedings under
that subsection.
53
 Bank Resolution Policy and BCA
65. Winding up by High Court.- (1) Notwithstanding anything contained in section
228, 241 and 372 of the Companies Act, and without prejudice to the powers
given under subsection (1) of section 64, the High Court Division shall under this
section order the winding up of a banking company, if
a)the banking company is unable to pay its debts;
b) the Bangladesh Bank makes an application for its winding up under this section
or section 64.
(2) The Bangladesh Bank shall make an application under this section for the
winding up a banking company if it is directed so to do by an order under clause
b) of subsection (5) of section 44.
(3) The Bangladesh Bank may make an application under this section for the
winding up of a banking company,-
a) if the banking company
i) has failed to comply with the requirements specified under section 13; or
ii) has by reasons of the provisions of section 31 become disentitled to carry on banking business in
Bangladesh; 54
 Bank Resolution Policy and BCA
iii) has been inhibited from receiving fresh deposits by an order under clause a) of subsection
(5) of section 44, or under clause b) of subsection (5) of Article 36 of the Bangladesh Bank
Order, 1972 (P.O. No. 127 of 1972); or
iv) has failed to comply with any requirement of this act other than the requirements laid down
in section 13, and after being informed about its failures by a notice in writing, continues so
to do;
v) has contravened any provision of this act and continues such contravention beyond such
period as may be specified in that behalf by the Bangladesh Bank from time to time, after
notice in writing of such contravention has been conveyed to it; or
b) if in the opinion of the Bangladesh Bank
i) a compromise or arrangement sanctioned by a Court in respect of the
banking company cannot be worked satisfactorily with or without
modifications; or
ii) the returns, statements or information furnished to it under or in pursuance
of the provisions of this Ordinance disclose that the banking company is
unable to pay its debts; or
iii) the continuance of the banking company is prejudicial to the interests of its
depositors. 55
 Bank Resolution Policy and BCA

(4) Without prejudice to the provisions contained in section 163 of the Companies
Act, a banking company shall be deemed to be unable to pay its debts if
a) it has refused to meet any lawful demand made at any of its offices or
branches within two working days; or
b) such demand is made elsewhere and the Bangladesh Bank certifies that the
banking company is unable to pay its debts; or
c) the Bangladesh Bank certifies in writing that the banking company is unable
to pay its
debts.
(5) Bangladeh Bank shall send a copy of any application made under subsection
(1) to the registrar of the Supreme Court.
Thanks