REGIONAL DEVELOPMENT BANKS ACT

Arrangement of Sections

1. Short title.

PART I

Establishment of Development Banks for Specified Regions

2. Incorporation Order for establishment of a Development Bank for a specified region.

3. Principal place of business, branches and agencies of the Bank.

4. Object of the Bank.

5. Powers of the Bank.

PART II

Management of the Bank

6. Board of Directors.

7. Constitution of the Board.

8. Nominated Directors.

9. Elected Directors Holders.

10. The First Board of Directors.

11. Chairman of the Board.

12. Remuneration of Directors.

13. Director to disclose interest in contract proposed to be made by the Bank.

14. Meetings of the Board, quorum and regulation of procedure.

15. Acts of the Board not to be invalid by reason of any vacancy.

16. Delegation of powers and duties of the Board.

17. Seal of the bank.

PART III

Finance

18. Authorised capital and contributions to the initial capital.

19. Bank to offer shares to others.

20. Transfer of shares by shareholders of the Bank.

21. Borrowings from the Government.

22. Borrowings from foreign Governments.

23. General Reserve Fund.

24. Special Reserve Fund.

25. Development Fund.

26. Payments of dividends.

27. Exemption of Bank from income tax.

28. Security on which loans may be granted by the Bank.

PART IV

Staff

29. General-Manager.

30. Staff of the Bank.

PART V

Audit of Accounts of the Bank

31. Financial year and Annual General Meeting.

32. Board to keep proper books of accounts and prepare balance sheet and profit and loss account.

33. Appointment of qualified auditor.

34. Duties and functions of the auditor.

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

36. Rules to be made in respect of maintaining accounts.

PART VI

General

37. Certain written laws not to apply to the Bank.

38. The Bank deemed to be an approved credit agency.

39. Exemption from stamp duty.

40. Indemnity of Directors.

41. Declaration of secrecy.

42. Rules.

43. Bank to be "leading institution” "Bank” and "licensed specialised Bank”.

44. Conversion of demand deposits into saving or time deposits.

PART VII

Vesting of Business of Regional Rural Development Banks

45. Vesting of business of Regional Rural Development Banks in a Bank.

46. Effect of the Vesting order.

47. Audit of accounts, and valuation of vested business.

48. Debentures to be issued to the Monetary Board to the value of excess net worth.

49. Saving provision.

50. Payment of compensation.

51. Sinhala text to prevail in case of inconsistency.

52. Interpretation.

6 of 1997.

AN ACT to enable the monetary board of the Central Bank to establish Development Banks for specified regions with a view to developing the economy of the region by providing, for the development of agriculture, industry, trade, commerce and other development activities in that region; to vest the business of Regional Rural Development Banks situated in such specified regions in the corresponding development banks; and for matters connected therewith or incidental thereto.

[Date of Commencement: 5th June, 1997]

1. Short title.

This Act may be cited as the Regional Development Banks Act.

PART I

Establishment of Development Banks for Specified Regions

2. Incorporation Order for establishment of a Development Bank for a specified region.

(1) Where the Minister, on the recommendation of Monetary Board of the Central Bank (hereinafter referred to as "the Monetary Board”) decides that it is necessary that a Development Bank (hereinafter referred to as "the Bank”) be established for a specified region for the purpose of developing the economy of such region by providing for the development of agriculture, industry, trade, commerce and other development activities, within that region, the Monetary Board shall by Order (hereinafter referred to as the "Incorporation Order”) published in the Gazette

(a) declare that a Bank be established for the region specified in paragraph (c), for the purpose of developing the economy of that region by providing for the development of agriculture, industry, commerce and other development activities in that region;

(b) assign a corporate name to the Bank;

(c) specify the region within which the Bank shall operate;

(d) specify the principal place of business of the Bank; and

(e) fix a date on which the Bank shall commence business.

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

3. Principal place of business, branches and agencies of the Bank.

(1) The principal place of business of the Bank shall be as specified in the Incorporation Order.

(2) The Bank may where the Board of Directors of the Bank considers it necessary so to do, establish its branches and agencies at any place within the region in which it operates as specified in the Incorporation Order.

4. Object of the Bank.

The object of the Bank shall be to provide for the overall economic development of the region within which it operates, with special emphasis on promoting and developing the agriculture, industry, trade, commerce and fisheries activities, and projects of Samurdhi beneficiaries, of that region and development projects undertaken by the Provincial Councils, Pradeshiya Sabhas and any other local authority in that region.

5. Powers of the Bank.

The Bank may, subject to the provisions of this Act, and without prejudice to any powers conferred on it by or under any law, exercise all or any of the following powers—

(a) to grant short term, medium term and long term loans and other accommodation to individuals, corporate bodies and groups;

(b) to open, maintain and manage, bank accounts, other than current accounts, for its customers;

(c) to discount, buy, sell and deal in, bills of exchange, promissory notes, drafts, shares, debentures, certificates, scripts and other instruments and securities;

(d) to negotiate loans and advances;

(e) to receive securities and valuables for safe custody;

(f) to collect and transmit money and securities;

(g) to manage property both movable and immovable, and carry on agency businesses which licensed commercial banks are permitted to carry on under the Banking
Act, No. 30 of 1988;

(h) to borrow or raise money in such manner as the Bank shall think fit, and to secure the prompt repayment of any money borrowed, raised or owing, by mortgage, charge or lien upon the whole or any part of the property or assets of the Bank, whether present or future, and, also by a similar mortgage, charge or lien to secure and guarantee the performance by the Bank of any obligation or liability it may undertake;

(i) to lend and advance money on security of property and give credit to persons, groups of persons, firms or companies on such terms as it may deem expedient, either with or without security;

(j) to assist and promote the marketing and processing of agricultural produce or any other products;

(k) to carry on the business of a pawn broker;

(l) to acquire or purchase any movable or immovable property or agricultural, industrial, fisheries, commercial or other enterprises and to manage, or arrange for the management of, any such property or enterprise, and to sell or otherwise dispose of, such property or enterprise;

(m) to undertake rural development projects which are of a small-scale, including pilot projects, in order to achieve the object of the Bank;

(n) to assist in promoting the development of the region within which it operates by providing encouragement to such activities as tree planting as part of ecological improvement, and the improvement of villages and generally, to provide advisory assistance which serves the object of the Bank;

(o) to undertake and promote the construction of warehouses, godowns, stores and buildings in the region within which it operates, required for agricultural, industrial, fisheries, trading and commercial activities;

(p) to enter into any agreement with any banking institution or co-operative society, subject to guidelines formulated by the Board of Directors of the Bank, for taking over any undertaking or project which is being financed by such banking institution or co-operative society or which is being carried on by such banking institution or co-operative society;

(q) to open accounts with the Central Bank, with any licensed commercial bank or any licensed specialised bank or co-operative society or with the approval of the Monetary Board, in any bank or financial institution outside Sri Lanka;

(r) to lease, let on hire, sell out right, or sell on a rent purchase basis, warehouses, god owns, stores and buildings in the region within which it operates, machinery, equipment and other goods;

(s) to acquire in any manner whatsoever and hold, take or give on lease or hire, mortgage, pledge, sell or otherwise dispose of, any movable or immovable property;

(t) to participate in the development of the infrastructure of the region within which it operates;

(u) to liaise with other institutions engaged in promoting, developing or financing developmental activities in the region within which it operates;

(v) to provide advisory services, to and undertake skills training of, self employed persons or those engaged in agriculture, industry, commerce and trade;

(w) to develop and manage industrial parks for small and medium scale enterprises;

(x) to appoint such officers and servants as may be necessary for carrying out the activities of the Bank, to fix the wages, salaries or other remuneration of such officers and servants and determine the terms and conditions of service of such officers and servants;

(y) to provide welfare and recreational facilities, and accommodation facilities, to officers and servants employed by the Bank;

(z) to enter into and perform all such contracts, whether in or outside Sri Lanka, as may be necessary for the exercise of the powers and the performance of the duties of the Bank;

(aa) to make rules in relation to its officers and servants including their appointment, promotion, remuneration, disciplinary control and the grant of leave to them;

(bb) to make rules in respect of the administration of the affairs of the Bank; and

(cc) to do all such other things which in the opinion of the Board of Directors of the Bank may be necessary to facilitate the proper carrying on of the business of the Bank.

PART II

Management of the Bank

6. Board of Directors.

(1) The management and administration of the affairs and business of the Bank shall vest in a Board of Directors (hereinafter referred to as "the Board”).

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