financial institution act and security exchange,1993

7/30/2019 Financial Institution ACT and Security Exchange,1993.

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F INANCIAL INSTITUTION ACT, 1993

Dr. Bandana Saha

Director General, BIBM


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FINANCIAL INSTITUTION LICENCE, ETC.

4. L icencing of financial institution.

(1) No person shall carry on financing business in Bangladesh

unless he holds a licence of financial institution issued by the

Bangladesh Bank.

(2) Every financial institution in existence shall, before the

expiry of three months from the date of commencement of this

Act, apply in writing to the Bangladesh Bank for a licenceunder this section:

Provided that nothing in sub-section (1) shall be deemed to

prohibit a financial institution in existence on the date of

commencement of this Act, if-(a) its application under this section remains under

considerations;

(b) Bangladesh Bank has not informed by notice that licence

shall not be granted to it.


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(3) Before issuing licence under this section, the Bangladesh

Bank has to be satisfied on the following matters of theproposed financial institution, namely:

(a) financial condition;

(b) characteristics of the management;

(c) adequacy of the capital and earning prospect;

(d) the objectives as specified in the memorandum

of Association.


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13. Acknowledgement of deposit.Where a financial institution

has accepted money from any person as a deposit, it shall

forthwith issue to that person a document which evidences

the indebtedness of the institution in respect of that deposit.14. Restrictions on credit facilities, etc. (1) No financial

institution shall

a) accept any deposit which is repayable on demand by

cheque, draft or order drawn by the depositor;

b) deal in gold or foreign exchange of whatever kind;

c) grant to any person, firm, corporation or company or to

any group of companies or persons which such person,firm, corporation or company is able to control or influence

any credit facilities in excess of 30% of the capital funds or,

with the approval of the Bangladesh Bank, in excess of

100% of the capital funds of the financial institution;


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d) grant loans which exceed 30% of its total credit facilities

or such other percentage as the Bangladesh Bank may

from time to time determine; or

e) grant unsecured advances, unsecured loans or unsecured

credit facilities which in the agregate and outstanding at

any one time exceed 10% of the paid up share capital

and reserves of the financial institution to any firm in

which any of its directors, whether jointly or severally,has any interest.

f) advance, loan or allow credit facilities as mentioned

clause (e) to any persons or group of persons referred to

in that clause exceeding five lacs taka.


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18. Power of the Bangladesh Bank to determinecertain matters.

The Bangladesh Bank may, by order, determine thefollowing matters, namely:

a. the maximum rates of interest that financial institutionsshall pay on different types or classes of deposits;

b. the maximum amount that financial institutions mayreceive from any person;

c. the maximum repayment periods for loans granted byfinancial institutions;

d. the maximum amount of loans or advances which financialinstitutions may grant to any person or class of persons;

e. the reserves to be maintained with the Bangladesh Bank;and

f. any other matter of public interest or financial policy.


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MINIMUM LIQUID ASSET

19. Holding of liquid assets.

1. Every financial institution all maintain a liquid assets asmay be fixed by the Bangladesh Bank from time to time.

2. For the purpose of this section, "liquid assets" means all

or any of the following, namely:

a. notes and coins that are legal tender in Bangladesh;

b. net balances at banks in Bangladesh;

c. net money at call in Bangladesh;

d. Bangladesh Treasury bills;

e. other assets that the Bank may prescribe


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SECURITIES AND EXCHANGECOMMISSION (SEC)


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ESTABLISHED ON 8TH JUNE 1993 UNDER THE SECURITIES AND

EXCHANGE COMMISSION ACT, 1993, SEC IS COMPOSED OF A

CHAIRMAN AND FOUR FULL TIME MEMBERS. THEGOVERNMENT APPOINTS THE CHAIRMAN AND MEMBERS OF

THE COMMISSION.

OBJECTIVES OF SEC

(a) PROTECTION OF INTEREST OF INVESTORS IN SECURITIES

(b) DEVELOPMENT OF SECURITIES MARKET.

(c) ENSURING PROPER ISSUANCE OF SECURITIES AND

COMPLIANCE OF LAW RELATING TO SECURITIES.


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MAIN FUNCTIONS OF SEC

(a) REGULATING THE BUSINESS OF STOCK EXCHANGE OR ANY

OTHER SECURITIES MARKET.(b) REGISTERING AND REGULATING THE BUSINESS OF STOCK-

BROKER, SUB-BROKER, SHARE TRANSFER AGENTS, BANKERS

AND MANAGERS TO ISSUES, TRUSTEE OF TRUST DEEDS,

REGISTRAR TO AN ISSUE, UNDERWRITERS, PORTFOLIOMANAGERS, INVESTMENT ADVISERS AND OTHER INTERMEDIARIES

IN THE SECURITIES MARKET.

(c) REGISTERING, MONITORING AND REGULATING OF COLLECTIVE

INVESTMENT SCHEMES INCLUDING ALL FORMS OF MUTUALFUNDS.

(d) PROMOTING MONITORING AND REGULATING ALL AUTHORIZED

SELF REGULATORY ORGANIZATIONS IN THE SECURITIES MARKET.


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(e) PROHIBITING FRAUDULENT AND UNFAIR TRADE

PRACTICES RELATING TO SECURITIES OR IN ANY SECURITIES

MARKET.(f) PROMOTING INVESTORS EDUCATION AND PROVIDING

TRAINING OF INTERMEDIARIES OF THE SECURITIES MARKET

(g) PROHIBITING INSIDER TRADING IN SECURITIES

(h) REGULATING SUBSTANTIAL ACQUISITION OF SHARES

OF STOCK AND TAKE-OVER OF COMPANIES.

(i) CALLLING FOR INFORMATION OR UNDERTAKING

INVESTIGATION AND INSPECTION, CONDUCTING INQUIRIES ANDAUDIT OF ANY ISSUER OR DEALER OF SECURITIES, THE STOCK

EXCHANGES AND INTERMEDIARIES AND ANY SELF REGULATORY

ORGANIZATION IN THE SECURITIES MARKET.


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(j) COMPILING, ANALYSING AND PUBLISHING INDICES ON THE

FINANCIAL PERFORMANCE OF ANY ISSUER OF SECURITIES.(k) CONDUCTING RESEARCH AND PUBLISHING INFORMATION

FOR THE ABOVE PURPOSE.


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Thank You.

financial institution act and security exchange,1993

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