GEM TRADING BANK ACT

Arrangement of Sections

1. Short title.

PART I

ESTABLISHMENT OF THE GEM TRADING BANK

2. Establishment of the Gem Trading Bank.

3. Bank to be a body corporate.

4. Head office and branch offices of the Bank.

5. Board of Directors.

6. Functions of the Bank.

7. Powers and duties of the Bank.

PART II

FINANCE

8. Capital of the Bank.

9. Issue of shares.

10. Liability of shareholders.

11. Funds of the Bank.

12. General borrowing powers of the Bank.

13. Borrowing from the Government.

14. Gem Reserve.

15. Gem Reserve Fund.

16. Panel of valuer.

17. Financial year of the Bank.

18. Audit.

19. Documents to be transmitted to the Minister to be laid before Parliament.

20. Investment or moneys of the Bank.

PART III

GENERAL

21. Declaration of secrecy.

22. Protection for action taken under this Act or on the direction of the Board.

23. Certain written law not to apply to the Bank.

24. Special provisions relating to the shareholders.

25. The Bank deemed to be a credit institution.

26. No writ to issue against person or property of a Director of the Bank.

27. Powers of the Board to make rules.

28. Offences and penalties.

29. Bank deemed to be a licensed commercial bank.

30. Monetary Board to give directions.

31. Officers and servants of the Bank to be deemed public servants.

32. Persons authorised to act on behalf of the bank.

33. Exempt from stamp duty.

34. Exemption from certain taxes.

35. Interpretation.

36. Sinhala text to prevail in case of inconsistency.

SCHEDULE

51 of 1993.

AN ACT to provide for the establishment of the Gem Trading Bank, for the purpose of promoting the flow of credit to and developing the gem industry and the jewellery industry; and for matters connected therewith or incidental thereto.

[Date of Commencement: 21st October, 1993]

1. Short title.

This Act may be cited as the Gem Trading Bank Act.

PART I

Establishment of the Gem Trading Bank

2. Establishment of the Gem Trading Bank.

There shall be established a Bank which shall be called the "Gem Trading Bank” (hereinafter referred to as "the Bank”) and which shall consist of the persons who are shareholders thereof.

3. Bank to be a body corporate.

The Bank shall by the name assigned to it by section 2 be a body corporate and shall have perpetual succession and a common seal and may sue and be sued in such name.

4. Head office and branch offices of the Bank.

The head office of the Bank shall be in Colombo. The branch offices of the Bank as the Board of Directors of the Bank may consider necessary may be established in places in Sri Lanka and abroad.

5. Board of Directors.

(1) The administration and management of the affairs of the Bank shall be vested in a Board of Directors (hereinafter referred to as the "Board”) consisting of—

(a) two persons nominated by the Monetary Board, one of whom shall be the Chairman of the Board;

(b) the Chairman of the National Gem and Jewellery Authority established by the National Gem and Jewellery Authority Act, 1993;

(c) a person elected by the shareholding financial institution; and

(d) a person nominated by the Monetary Board, from among persons engaged in the gem industry or the jewellery industry.

(2) The provisions of the Schedule to this Act shall have effect in relation to the term of office of the Directors of the Board, the remuneration payable to such Directors, meetings of the Board and the seal of the Bank.

(3) The Board shall exercise, perform and discharge all powers, duties and functions conferred or imposed on, or assigned to, the Bank by this Act.

6. Functions of the Bank.

The functions of the Bank shall be to promote the flow of credit and to develop, the gem industry and the jewellery industry of Sri Lanka and to provide refinance facilities for commercial banks lending to the gem industry and the jewellery industry and to provide credit facilities to persons engaged in the gem industry and the jewellery industry.

7. Powers and duties of the Bank.

In discharging its functions the Bank may exercise and perform all or any of the following powers and duties—

(a) to grant loans and other accommodation on securities and property (including gems, jewellery or precious metal) and to give credit to persons, or companies on such terms as it may deem expedient, either with or without security, for the development of the gem industry or the jewellery industry;

(b) to open, maintain and manage current, deposit, savings and other accounts;

(c) to buy, stockpile and sell, or enter into such other dealings in, gems, precious metals and jewellery, as may be necessary for the discharge of its functions;

(d) to subscribe to, purchase or underwrite, the issue of, stocks, shares, bonds and acceptable instruments, of any company engaged in the gem industry or the jewellery industry;

(e) to issue bid bonds and guarantees, in or outside Sri Lanka, on behalf of the gem industry or the jewellery industry;

(f) to accept, collect, discount, re-discount, sell or negotiate, in or outside Sri Lanka, bills of exchange or promissory notes arising out of transactions relating to the export or import of gems or jewellery, and to grant loans and advances, in or outside Sri Lanka, against such bills of exchange or promissory notes:

(g) to open, issue, confirm or endorse, letters of credit and to negotiate or collect, bills of exchange and other documents drawn thereunder, pertaining to the gem industry or the jewellery industry;

(h) to grant loans and advances, within and outside Sri Lanka, to any person engaged in the gem industry or the jewellery industry;

(i) to finance the export or import of, machinery and equipment, on an outright or lease basis to be used, for the gem industry or the jewellery industry;

(j) to buy or sell, foreign exchange or enter into, dealings in foreign exchange, as may be necessary for the discharge of its functions, subject to the existing foreign exchange laws;

(k) to acquire or purchase any movable or immovable property, used for the gem industry or the jewellery industry;

(l) to convert a part or whole of its loans to bonds or debentures issued by companies engaged in the gem industry or the jewellery industry, and to subscribe to bonds and debentures issued by companies engaged in the gem industry or the jewellery industry;

(m) to open accounts in commercial banks or any other financial institutions, in or outside Sri Lanka, or to make any agency arrangement with, or act as an agent or correspondent of, any commercial bank or any other financial institution, within or outside Sri Lanka;

(n) to transfer for consideration, any instrument relating to loans or advances granted by it;

(o) to raise such sums of money, in or outside Sri Lanka, by way of loans or otherwise as may be necessary for discharging its functions;

(p) to hold stocks of gems and jewellery, for the purpose of trading, buffer stocks or otherwise or as may be otherwise necessary for the discharge of its functions;

(q) to subscribe to, invest in, or purchase, stocks, shares, bonds or debentures to the extent necessary for the enforcement of a lien, pledge or contractual right;

(r) to undertake and finance, research, surveys, techno economic or any other studies, in connection with the planning, promotion and development of the gem industry or the jewellery industry;

(s) to provide technical, marketing, administrative and financial assistance of any kind to the gem industry and the jewellery industry;

(t) to form such subsidiaries as are necessary for carrying out activities related to the discharge of the functions of the Bank;

(u) to collect, compile and disseminate, market and credit information in respect of the gem industry or the jewellery industry;

(v) to provide training facilities in marketing and valuation of gems and jewellery, banking and management, and allied subjects;

(w) to provide re-finance facilities to any bank or financial institution approved by the Monetary Board, for the development of the gem or the jewellery industry;

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