NATIONAL SAVINGS BANK Act

Arrangement of Sections

1. Short title.

PART I

Establishment and Control of the National Savings Bank

2. Establishment of the National Savings Bank.

2A. Object of the Bank.

3. Seal of the Bank.

4. Principal place of business and branches and agencies of the Bank.

5. Capital of the Bank.

6. Authorised activities and functions of the Bank.

7. Management of the Bank vested in the Board.

8. Constitution at the Board.

9. Disqualifications for being appointed a Director of the Board.

10. Remuneration of Directors.

11. Chairman of the Board.

12. Quorum for any meeting of the Board.

13. Meetings of the Board.

14. Disclosure of interest by a Director.

15. Minutes of meeting of the Board.

16. Determination of question at meetings of the Board.

17. Granting of financial accommodation.

17A. Information to be furnished to the Minister.

18. Guarantee by the Government of Sri Lanka.

19. Expenses of the Bank.

20. Establishment of reserves.

21. Repealed.

22. Repealed.

23. Repealed.

24. Person who may execute documents for and on behalf of the Government.

25. Receipts when valid.

PART II

Appointment of Staff and Audit of Accounts

26. Appointment of the General Manager.

26A. Delegation of powers to the General Manager and any other officer.

27. Appointment of advisers and consultants.

28. Repealed.

29. Repealed.

30. No liability for damage or loss caused otherwise than by misconduct or willful default.

31. Officers to furnish security.

32. Reimbursement for expenses incurred on behalf of the Bank.

33. Declaration of secrecy.

34. Right to refuse to answer questions.

35. Funds and scheme for benefit of officers and servants of the Bank and dependants.

36. Accounts of the Bank.

37. Audit of account of the Bank.

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

PART III

Business of the Bank General

39. Repealed.

40. Repealed.

41. Interest to be paid.

42. Payments other an interest.

43. Accounts by or on behalf of minors.

44. Nominations by persons having a deposit or savings account.

45. Settlement of disputes.

46. Payment in case of incapacity.

47. Deposits Reserve.

48. Registered address and notices.

49. No Director or employee of the Bank to guarantee loans.

50. Restrictions on loans to Directors.

51. Priority of charge created by loan granted by Bank.

52. Repealed.

53. Repealed.

54. Repealed.

55. Repealed.

56. Repealed.

57. Repealed.

58. Repealed.

59. Repealed.

60. Power of Bank to inspect valuation rolls of local rating or taxing authority.

61. Repealed.

62. Repealed.

63. Repealed.

64. Repealed.

65. Repealed.

66. Repealed.

67. Repealed.

68. Repealed.

69. Repealed.

70. Repealed.

71. Repealed.

72. Repealed.

73. Repealed.

74. Repealed.

PART IV

General

75. Certain payments to be made from the funds of the Bank.

76. Loans from the central Bank.

77. Appointment of public officers to the staff of the Bank.

78. Debt Conciliation Ordinance not to apply to debts due to the Bank.

79. Pawnbrokers Ordinance not to apply.

80. Exemption from stamp duty.

81. Repealed.

82. Offences.

83. Offences by bodies of persons.

84. Rules.

85. Regulations.

86. Repeal of certain laws dissolution of certain institutions, consequential provisions.

87. Interpretation.

8 of 1978,

30 of 1971,

8 of 1982,

33 of 1987,

28 of 1995,

22 of 1999.

AN ACT to provide for the establishment of the National Savings Bank with the object of carrying on, amongst other activities, the business presently carried on under the ceylon Savings Bank Ordinance, the ceylon Post Office Savings Bank Ordinance and the Savings Certificates Ordinance, for the repeal of those Ordinances, and to make provision for matters connected therewith or incidental thereto.

[Date of Commencement: 29th September, 1971]

1. Short title.

This Act may be cited as the National Savings Bank Act.

PART I

Establishment and Control of the National Savings Bank

2. Establishment of the National Savings Bank.

(1) There shall be established a Bank called the National Savings Bank (hereinafter referred to as the "Bank”).

[S 2(1) am by s 2 of Act 28 of 1995.]

(2) The Bank shall, by the name assigned to it by subsection (1), be a body corporate and shall have perpetual succession and a common seal and may sue and be sued in such name.

2A. Object of the Bank.

The object of the Bank shall be the promotion of savings among the people of Sri Lanka, particularly among those with limited means, and the profitable investment of savings so mobilised.

[S 2A ins by s 3 of Act 28 of 1995.]

3. Seal of the Bank.

(1) The common seal of the Bank shall be in the custody of the Board of Directors of the Bank (hereinafter referred to as "the Board”).

(2) The seal of the Bank may be altered in such manner as may be determined by the Bank.

(3) Subject to the provisions of subsection (4) the Seal of the Bank shall not be affixed to any instrument or document except in the presence of two members of the Board both of whom shall sign the instrument or document in token of their presence.

[S 3(3) am by s 2 of Act 22 of 1999.]

(4) Where due to sickness, temporary absence from Sri Lanka or there being vacancies in the membership of the Board, affixing of the seal under subsection (3) cannot be done in the presence of two members, the seal may be affixed to any instrument or document in the presence of one member and the General-Manager of the Bank.

[S 3(4) ins by s 2 of Act 22 of 1999.]

4. Principal place of business and branches and agencies of the Bank.

(1) The Bank shall have its principal place of business in Colombo and may have such branches, and may appoint such agencies and agents as may be necessary for the transaction of business of the Bank and may also appoint agents and establish representative offices outside Sri Lanka for purpose of mobilisation of deposits.

[S 4(1) subs by s 3 of Act 22 of 1999.]

(2) For the purposes of subsection (1) the Bank may appoint as an agent, subject to such terms and conditions as may be prescribed, any person, commercial Bank or body corporate.

[S 4(2) am by s 3 of Act 22 of 1999.]

5. Capital of the Bank.

(1) The authorised capital of the Bank shall be ten billion rupees divided into one billion shares of ten rupees each.

(2) The issued capital of the Bank shall be as determined from time to time by the Minister in consultation with the Board, by Order published in the Gazette, so however that such issued capital shall not be an amount less than one billion and two hundred million rupees divided into one hundred and twenty million shares of ten rupees each.

(3) All shares of the Bank shall be issued in the name of the Secretary to the Treasury in his official capacity and who shall not dispose of those shares in any manner whatsoever.

[S 5 subs by s 4 of Act 28 of 1995.]

6. Authorised activities and functions of the Bank.

(1) subject to the provisions of this Act and any other law including regulations made or directions issued there under, the Bank is authorised to undertake any or all of the following functions or activities—

[S 6(1) subs by s 5 of Act 28 of 1995; am by s 4 of Act 22 of 1999.]

(a) the promotion and mobilisation of savings in Sri Lanka and any activity incidental thereto, including the opening of deposit accounts, savings certificate or any other instrument or product that will enable the Bank to mobilise savings;

[S 6(1)(a) subs by s 5 of Act 28 of 1995; am by s 4 of
Act 22 of 1999.]

(b) the purchasing of, and trading in any securities, debentures, treasury bills or any such financial instruments issued or guaranteed by the Government;

[S 6(1)(b) subs by s 5 of Act 28 of 1995.]

(c) lending in the interbank call money market, subject to such overall ceiling as may be approved from time to time by the Monetary Board;

[S 6(1)(c) subs by s 5 of Act 28 of 1995.]

(d) undertaking wholesale lending to licensed commercial Banks and other financial institutions for on-lending to their clients;

[S 6(1)(d) subs by s 5 of Act 28 of 1995.]

(e) undertaking retail lending to its own depositors against the security of their deposits or any other security or guarantee as determined by the Board;

[S 6(1)(e) subs by s 5 of Act 28 of 1995; am by s 4 of
Act 22 of 1999.]

(f) providing housing loans or other loans for non commercial purposes on security provided by the mortgages of immovable property;

[S 6(1)(f) subs by s 5 of Act 28 of 1995; am by s 4 of
Act 22 of 1999.]

(g) participating in the syndication of loans with other Banks and financial institutions;

[S 6(1)(g) subs by s 5 of Act 28 of 1995.]

(h) purchasing, taking on lease, exchange, hiring or otherwise acquiring, any immovable or movable property or any rights in such property or any rights in such property and leasing, mortgaging, selling or otherwise disposing of such property;

[S 6(1)(h) subs by s 5 of Act 28 of 1995; am by s 4 of
Act 22 of 1999.]

(i) constructing buildings on land purchased, leased or otherwise acquired by the Bank;

[S 6(1)(i) subs by s 5 of Act 28 of 1995.]

(j) trading in financial instruments issued or guaranteed by financial institutions and quoted companies approved by the Board;

[S 6(1)(j) subs by s 4 of Act 22 of 1999.]

(k) providing re-finance facilities to licensed commercial Banks and licensed specialised Banks, for the purpose of medium and long term project lending;

[S 6(1)(k) ins by s 4 of Act 22 of 1999.]

(l) issuing letters of guarantee against deposits;

[S 6(1)(l) ins by s 4 of Act 22 of 1999.]

(m) borrowing moneys from local and international credit institutions or agencies;

[S 6(1)(m) ins by s 4 of Act 22 of 1999.]

(n) conducting lotteries and prize competitions;

[S 6(1)(n) ins by s 4 of Act 22 of 1999.]

(o) investing in equity capital of any licensed commercial Bank, licensed specialised Bank, a subsidiary of any licensed commercial Bank or licensed specialised Bank or in any public company listed or seeking listing in a licensed stock exchange;

[S 6(1)(o) ins by s 4 of Act 22 of 1999.]

(p) opening of rupee accounts for non residents;

[S 6(1)(p) ins by s 4 of Act 22 of 1999.]

(q) collection and conversion of foreign currency from depositors;

[S 6(1)(q) ins by s 4 of Act 22 of 1999.]

(r) providing safe custody and safe deposit locker facilities to customers;

[S 6(1)(r) ins by s 4 of Act 22 of 1999.]

(s) undertaking pawn broking business subject to such conditions as may be determined by the Monetary Board;

[S 6(1)(s) ins by s 4 of Act 22 of 1999.]

(t) providing facilities for money transfers;

[S 6(1)(t) ins by s 4 of Act 22 of 1999.]

(u) establishing subsidiary companies with the written approval of the Monetary Board;

[S 6(1)(u) ins by s 4 of Act 22 of 1999.]

(v) undertaking trust and estate administration;

[S 6(1)(v) ins by s 4 of Act 22 of 1999.]

(w) carrying on suit other activities as may he incidental or conductive to the functions and activities referred to above.

[S 6(1)(w) ins by s 4 of Act 22 of 1999.]

(2) Investment by the Bank in financial instruments referred to in paragraph (b) of subsection (1) of this section shall constitute not less than sixty per centum of the money deposited in savings and deposit accounts in the Bank unless otherwise determined by the Monetary Board.

[S 6(2) subs by s 5 of Act 28 of 1995.]

7. Management of the Bank vested in the Board.

(1) The general supervision, control and administration of the affairs and the business of the Bank shall be vested in the Board.

(2) The Board may exercise all or any of the powers of the Bank.

8. Constitution at the Board.

(1) The Board shall consist of seven Directors of whom—

(a) five shall be appointed by the Minister (hereinafter referred to as the "appointed Directors”) from among persons whom he considers to be capable of directing the affairs of the Bank efficiently and effectively in such a manner as will enable the Bank to achieve its object, and each of whom—

(i) has experience at a senior managerial level, in banking, commerce, business or allied fields or has had administrative experience; or

(ii) has professional qualifications in banking, economics, commerce, law, accountancy, business management or other discipline; and

(b) one shall be the Secretary to the Treasury or his nominee; and

(c) one shall be the Postmaster-General or his nominee.

(2) An appointed Director shall unless he vacates office earlier by death, resignations or removal hold office for a term of three years.

(3) The Minister may, for cause assigned, remove an appointed Director from office where he is satisfied that the continuance of that Director in office is detrimental to the interest of the Bank.

(4) An appointed Director may at any time resign his office by a letter addressed to the Minister and such resignation shall take effect upon it being accepted by the Minister in writing.

(5) An appointed Director vacating office by resignation or effluxion of time shall be eligible for reappointment.

(6) If an appointed Director vacates his office otherwise than by expiration of his term of office, a Director may be appointed in his place by the Minister, and such second- mentioned Director shall hold office during the unexpired part of the term of office of the Director so vacating office.

(7) If an appointed Director is temporarily unable to discharge the duties of his office on account of ill health or absence from Sri Lanka, the Minister, may appoint another eligible person to act for him.

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