Bank Companies Act (Amendment), 2013: WHAT IS ITS NEW EAT!"E# 314
Bangladesh Bank is, undeniably, the regulatory authority of banking as well as other financial sectors. Bank Companies Act, 1991 had fortified the power of Bangladesh Bank, yet, arious scandals in the banking sector in recent time, a statutory showdown was re!uired and Bank Companies Act "amendment#, $%13 was no more charming to that. &he power which was ested through Bank Companies Act, 1991 to Bangladesh Bank , was enough to check the irregularities in banking societies, all gone in ein since political manipulation in the credit system viz. 'allmark, Bismillah (roup, BA)*C Bank, +B-s yesha (roup loan scam, Al/Arafa-s 0%% crore loan scam and stagnancy in public banks pushed under so many pressure that a change should hae been ineitable. &hus it re!uires seeing the law what significant change has eer been made 1$ SECTI%N&3: empo'ein o* Ban+ades Bank to commence inspection:
)ection 3 has been amended in implicating the fact by titling that Bank Companies Act, $%13 will be applied to co/operaties societies and other financial institutions rather than cooperaties banks. Application of Bank Companies Act "Amendment#, $%13 will be limited since Cooperatie )ocieties Act, $%%1 "Act no. 42 of $%%1# and icro/Credit egulatory Authority Act, $%% "Act no. 3$ of $%%# will be applied to all the affairs of cooperaties societies and other financial institutions. 5nly the serious addition is that any financial participation of non/ members of cooperaties societies will be barred and in that eent Bangladesh Bank will be entitled to interene which might deelop the sense of responsibility to the managing committee of the cooperaties society that members of the cooperaties will get priority in financial mechanism of the societies. oreoer 3"3# has clearly implicated that Bangladesh Bank may hae the e!ual authority to inspect to the subsidiaries companies of bank companies. &he substituted part of section 3 is proided in the following haing made translation by the reiewer himself.
6 3$ -imited app+ication o* te Act *o Co&opeati.e Societies and ote *inancia+ instit/tions$ 7 "1# +othing in this Act shall be applicable for the co/operatie societies established under Cooperatie )ocieties Act, $%%1 "Act no. 42 of $%%1# or any other acts relating to cooperatie societies for the time being in force and micro/credit organi8ations, authori8ed to conduct micro/credit actiities under icro/Credit egulatory Authority Act, $%% "Act no. 3$ of $%%#. roided that, likewise the inspection so commenced to the bank companies under section 44 and 40 for the receipt of unlawful deposit from a person or an organi8ation e:cept to the members of any cooperatie societies, Bangladesh Bank may cause an inspect to the cooperatie societies, and may direct to do so. "$# +othing e:cept to the rules of section $2A and section $2 AA and subsection "# of section 12 shall be applicable for any licensee financial institutions under ;inancial *nstitutions Act, 1993 " At no. $2 of 1993#. "3# +otwithstanding anything contained in any other acts for the time being in force or registered under any other acts, under the eti!uette the bank companies under section 44 and 40 are inspected or likewise those are directed, Bangladesh Bank may inspect to subsidiaries of any bank companies so composed of in accordance with subsection "1# of section $, and may direct to those subsidiaries companies.< 2$ %ISSI%NS % SECTI%N : N% ESCAE "% THE B!"EN % BAN4 C%ANIES ACT, 2013:
By this section, (5B might e:ercise of suspending the application of the law for a certain period of time which might gie a safe passage of letting perersion in the financial sector if they might deem fit to do so, most e:tensiely, taming the scandalous course of action, hopefully the omission of this section might help to fill up the loop holes. 3$ SECTI%N 5: Te de*inition o* 6+oan de*a/+te7 and 6mico cedit oani8ation7 added$
*n section 0 of 1991, there was neither any definition of loan defaulter nor there any definition of micro/credit organi8ation. *n the present conte:t, the number of loan defaulter is increasing for arious reasons the giant borrowers are manipulating their right of taking loan and remain indifferent to the payment. &o regulari8e the loan, a hidden banking practicing has been emerged by scrupulous officers of the banks. *n addition, to current estimation, the limit of spread is more than the limit= it is 0 percent to some e:tent 11.23 percent= studying oer 42 banks $> banks always crossing the limit. ?conomists predict that if such a phenomenon is emerged in the bank, the borrowers are to pay highest rate of interest, as a result of burden of interest, the number of loan defaulter is increased. oreoer, abusing the political power, wearing mask of businessmen, a ested politicians are borrowing huge sum of money from the bank. 'allmark is the latest and highest in the history of Bangladesh . Besides it, )A)C5 group has borrowed huge sum from Al/ Arafah Bank which may likely to be default since security is insufficient. *n the same way, loan disbursed to yesha (roup by +B is definitely a result of political influence. *n such banking culture the definition of 6loan defaulter< was re!uired to be added since it has been indispensable
to the bank. *n 1991, there was insignificant number of micro credit organi8ations in the country. Currently, micro credit organi8ations hae been bloomed. Alongside Bank, these segments hae been participating to crediting. A slight change has been made in the case of secured loan and adance. )pecial bank though changed in speciali8ed bank in "m#, the ?nglish ersion of Act of 1991 aailable in the market still bears the word speciali8ed. &he act should proide the prescribed word in bracket. *n "h# depositor and profit and loss should be pro@ected in a complete form. &he definition and other substitutions are proided herewith 6 "CC# 6-oan e*a/+te7 means any debtor person or organi8ation or company under whose behalf any adance, loan or any other financial benefit or any part or interest or profit thereof has been e:pired "si:# months as per the definition proclaimed by Bangladesh Bank. E9p+anation$ ;or the purpose of this clause, otherwise any person, organi8ation or company are not the director of any other organi8ations or, unless his share or any part thereof is beyond ma:imum $% or as the case may be, organi8ations or companies are not the guarantor of loan of the organi8ation aforesaid, the organi8ation shall be sei8ed to be his or his concerned organi8ation.
"c# "CCC# 6ico cedit oani8ation7means any micro credit organi8ation as per definition stipulated in clause "$1# of section $ of icro Credit egulatory Authority Act, $%% "Act no. 3$ of $%%#. "e# 6Sec/ed +oan o ad.ance7means such a loan or an adance which is made on the security of the asset and the market alue of the asset aforesaid estimated in a prescribed procedure by Bangladesh Bank must not be lesser about than the amount of loan and an unsecured loan and adance mean such a loan or an adance or any part thereof against which no security is deposited. 6 "h# epositor or profit and loss< "m# speciali8ed. speciali8ed.< T% BE C%NTIN!E
Muhammad Shamim Akhter, 10 September, 2013
