STATE MORTGAGE AND INVESTMENT BANK LAW

Arrangement of Sections

1. Short title.

PART I

ESTABLISHMENT

2. Establishment of the State Mortgage and Investment Bank.

3. Members of the Bank.

4. Head office of the Bank.

5. The Law governing the Bank.

6. Business of the Bank.

PART II

MANAGEMENT BOARD OF DIRECTORS

7. Board of Directors.

8. Powers of the Board.

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

10. Director's term of office.

11 Remuneration of directors.

12. Disqualification and removal of directors.

13. Vacancies on the Board.

14. Chairman of the Board.

15. Meetings.

16. Quorum.

17. Disclosure of interest by a director.

18. Minutes.

19. Powers of Minister to issue directions to the Board.

OFFICERS OF THE BANK

20. Appointment and powers of the General Manager.

21. Employees.

22. Advisers.

23. Agents.

GENERAL

24. Security from employees.

25. Protection of employees.

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

27. No director or employee of the Bank to guarantee loans.

28. Restrictions on loans to directors.

29. Declaration of auditor.

30. Right to refuse to answer questions.

PART III

BUSINESS

31. Kinds of business the Bank is authorised to carry on and transact.

31A. Nomination by persons having term deposit.

32. Board's power to grant loans.

33. Withdrawal of the grant of a loan.

34. Board's power to investigate application of loan.

35. Recalling of loans.

36. Change of security.

PART IV

FINANCE

37. Capital of the Bank and the power to raise money.

38. State Mortgage and Investment Bank debentures, securities, stocks and shares.

39. Exemption of debentures from stamp duty.

40. Charge upon Consolidated Fund.

41. Government to guarantee.

42. Priority of charge created by loan.

43. Special provisions relating to loans given by the Bank.

44. Anticipation of payments

45. Funds of the Bank.

46. Utilisation of the profits of the Bank.

PART V

RECOVERY

47. Action by Board where default is made.

48. Authorisation of manager to take possession of mortgaged property.

49. Procedure where manager is appointed.

50. Authorisation of sale of mortgaged property.

50A. Authorisation of any other person in place of person authorised under section 50, to sell property mortgaged to the bank.

51. Where borrower is dead.

52. Notice of resolution.

53. Notice of sale.

54. Payment before sale.

55. Upset Price.

56. Default in respect of one of several loans on same property.

57. Recovery of expenses and costs incurred by the bank.

58. Payment of excess.

59. Certificate of sale.

60. Order for delivery of possession.

61. Cancellation of sale.

62. Resale by the Bank.

63. Limit of retention of property by the Bank.

64. Meaning of property.

PART VI

ACCOUNTS

65. Applicability of the Public Corporations (Financial Control) Act.

PART VII

GENERAL

66. Custody and affixing of common seal.

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

68. The Bank deemed to be banking institution under the Monetary Law Act.

69. Receipts when valid.

70. Contracts.

71. Bills of exchange and promissory notes.

72. Persons authorised to act on behalf of the Bank.

73. Execution of deeds abroad.

74. Rules made by the Board.

75. Regulations made by the Minister.

76. Penal interest in case of default

77. Power to recall loan on change of ownership of security.

78. Power to inspect valuation rolls of local rating authorities.

79. Liability as public servants of directors and employees.

80. Forgery of debentures.

81. False evidence.

82. Liability of directors and values for participating in the sanctioning of certain loans.

83. Offences.

84. Registered address and notices.

85. Repeal of Certain Enactments.

86. Interpretation.

13 of 1975,

62 of 1981,

29 of 1984,

10 of 1994.

A LAW to provide for the establishment of the State Mortgage and Investment Bank with the object of carrying on, amongst other activities, the business presently carried on under the Ceylon State Mortgage Bank Ordinance and the Agricultural and Industrial Credit Corporation Ordinance, for the repeal of those ordinances, and to make provision for matters connected therewith or incidental thereto.

[Date of Commencement: 15th May, 1975]

1. Short title.

This Law may be cited as the State Mortgage and Investment Bank Law.

PART I

ESTABLISHMENT

2. Establishment of the State Mortgage and Investment Bank.

(1) There shall be established a bank which shall be called the State Mortgage and Investment Bank (hereinafter referred to as the "Bank”), and which shall consist of the persons who are for the time being members of the Bank under section 3.

(2) The purpose of the Bank shall be to assist in the development of agriculture, industry and housing, by providing financial and other assistance in accordance with the provisions of this Law.

(3) The Bank shall be a body corporate having perpetual succession and a common seal and shall under the above mentioned name be capable of suing and being sued; and shall subject to the provisions of this Law be capable of acquiring, holding, and alienating property movable and immovable and of doing all such acts and things as bodies incorporate may do and perform.

3. Members of the Bank.

The members of the Board of Directors shall be the members of the Bank.

4. Head office of the Bank.

The head office of the Bank shall be in Colombo. Such branch offices of the Bank as the Board considers necessary may be established by the Board.

5. The Law governing the Bank.

The Bank shall be conducted and managed in accordance with the provisions of this Law to the exclusion of the provisions of the Companies Ordinance1 and any other law specially governing banks.

6. Business of the Bank.

Subject to the provisions of this Law, the Bank is authorised to carry on and transact the several kinds of business specified in section 31.

PART II

MANAGEMENT BOARD OF DIRECTORS

7. Board of Directors.

The general supervision, control and administration of the affairs and business of the Bank shall be entrusted to a Board of Directors (hereinafter referred to as the ‘"Board”), consisting of nine fit and proper persons appointed by the Minister. Three of the persons so appointed shall be a representative each of-

(a) the Ministry of the Minister in charge of the subject of Agriculture,

(b) the Ministry of the Minister in charge of the subject of Housing, and

(c) the Ministry of the Minister in charge of the subject of Livestock Development.

[S 7 am by s 2 of Act 29 of 1984.]

8. Powers of the Board.

The Board may exercise all such powers and do all such acts and things as may be necessary for carrying on the business of the Bank.

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

No act or proceeding of the Board shall be invalid by reason only of the existence of any vacancy among the directors, or any defect in the appointment of a director.

10. Director's term of office.

Every director shall ordinarily be appointed for a term of three years and he shall hold office for that period unless he dies, retires, or is removed or disqualified earlier.

11. Remuneration of directors.

A director may be remunerated out of the funds of the Bank in such manner and at such rates as the Minister may determine.

12. Disqualification and removal of directors.

(1) The Minister may, without assigning any reason, remove a director from office.

(2) No person shall be appointed to the office of director who—

(a) has been adjudicated an insolvent; or

(b) is of unsound mind or has been convicted of an offence and sentenced to imprisonment without the option of a fine.

(3) A person appointed to the office of director shall become disqualified to retain his office and shall ipso facto cease to be director if—

(a) he is adjudicated an insolvent, or assigns his estate for the benefit of his creditors, or enters into a deed of arrangement with his creditors or makes an assignment of his remuneration for their benefit; or

(b) he is of unsound mind or is convicted of an offence and sentenced to imprisonment without the option of a fine; or

(c) he is absent without leave from the Minister from all the meetings of the Board during any three consecutive months:

Provided that a director becoming disqualified to retain his office and ipso facto ceasing to be a director under paragraph (c) shall not thereby be deemed ineligible for reappointment.

(4) No member of Parliament shall be appointed to or retain the office of director.

13. Vacancies on the Board.

(1) When a director ceases to hold office by reason of the expiry of the period for which he was appointed, the Minister shall make a new appointment. The retiring director shall be eligible for reappointment if not otherwise disqualified.

(2) If a director ceases to hold office before the expiry of the period for which he was appointed, the Minister shall make a new appointment for the remainder of the period for which such director would have held office.

(3) Where a director is granted leave of absence, the Minister may make a new appointment for the period for which such director is granted leave.

14. Chairman of the Board.

(1) The Minister shall appoint from among the directors the Chairman of the Board. The Chairman shall preside at every meeting of the Board at which he is present and shall have a second or casting vote in all cases of an equality of votes. In the absence of the Chairman, the directors present at a meeting shall choose one of their number to preside who shall for that meeting have all the powers of the Chairman including the right to a casting vote.

(2) Where a director who has been appointed the Chairman of the Board, is granted leave of absence for any period, the Minister shall make a new appointment, from among the directors, of a Chairman for that period.

15. Meetings.

(1) A meeting of the Board shall be held at least once a month or oftener if the Chairman deems it necessary.

(2) The Chairman shall upon a written requisition of two directors call a special meeting. No such special meeting shall be held unless four days' notice specifying the time of such meeting and the purpose for which it is to be held has been given by written or printed notice to every director.

(3) If it appears to the Minister that any director is temporarily unable to discharge the duties of his office on account of ill health, absence from Sri Lanka or for any other cause or reason whatsoever, the Minister may appoint any other person to act in place of such director.

(4) Subject to the provisions of this Law, the procedure to be followed at meetings of the Board shall be as determined by rules made under this Law or, in the absence of such rules, as may be determined by the Board.

16. Quorum.

Three members shall constitute a quorum at any meeting of the Board and all acts authorised or required to be done by the Board shall be decided by a majority of directors present and voting at a meeting at which a quorum is present:

Provided that when only three members are present no loan exceeding twenty-five thousand rupees shall be sanctioned except by a unanimous resolution.

17. Disclosure of interest by a director.

A director who, or whose spouse or dependent child, is directly or indirectly interested in any business transacted or proposed to be transacted by the Board shall disclose the nature of such interest at the meeting of the Board where such business is discussed. The disclosure shall be recorded in the minutes of the Board, and such director shall not take part in any deliberation or decision of the Board with respect to that business, and shall withdraw from such meeting while such deliberation is in progress or decision is being made.

18. Minutes.

Minutes of the proceedings of every meeting of the Board shall be regularly drawn up and fairly entered in books to be kept for the purpose, and the books shall be so kept as to show properly tabulated details of the business transacted at such meeting. The minutes of the proceedings of each meeting shall be submitted at the next ensuing meeting, and if they are then passed as correct they shall be confirmed by the signature of the person presiding thereat, and shall thereafter be prima facie evidence of the proceedings of which they are a record.

19. Powers of Minister to issue directions to the Board.

The Minister may after consultation with the Board, give to the Board general or special directions in writing as to the transaction of the business of the Bank and the Board shall give effect to such directions.

OFFICERS OF THE BANK

20. Appointment and powers of the General Manager.

(1) The Board shall appoint a General Manager to the staff of the Bank on such salary and with such allowances as may be fixed by the Board.

(2) The General Manager shall be the chief executive officer of the Bank, and all acts which are directed by this Law to be done by the Bank or the Board may, unless the contrary intention appears from the context, be done by the General Manager if he is specially or generally authorised in writing thereto by the Board.

(3) The General Manager or any other officer of the Bank specially authorised by the Board shall function as the Secretary to the Board. The General Manager and where the Board has authorised any other officer of the Bank to function as the Secretary to the Board such officer, shall attend and take part in every meeting of the Board, unless the Board otherwise directs, but shall have no right to vote thereat.

[S 20(3) subs by s 2 of Act 10 of 1994.]

21. Employees.

For the purpose of carrying out the provisions of this Law, the Board may appoint such employees as the Board considers necessary. The Board may also, from time to time, fix and alter the salaries and allowances of such employees.

22. Advisers.

The Board may, from time to time appoint any duly qualified person, firm or incorporate or unincorporated body to act as legal, economic, financial or technical advisors and a panel of valuers to the Bank, and such persons shall be remunerated in accordance with such scale of fees as may be prescribed.

23. Agents.

The Board may appoint any bank or any person as its agent in Sri Lanka or elsewhere to do any act on its behalf which it is authorised to delegate to another and it may enter into an agreement with such agent as to the duties to be performed and the remuneration therefor.

GENERAL

24. Security from employees.

Every employee of the Bank other than a member of any class of employees exempted by the Board, shall furnish security to the satisfaction of the Board for the due and faithful performance of his duties.

25. Protection of employees.

No director and no employee of the Bank shall be liable, either civilly or criminally, in respect of anything which he may have done or may have omitted to do when acting in good faith in pursuance or in supposed pursuance of his powers under this Law.

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

Every director General Manager, auditor, secretary, adviser or other employee of the Bank shall be indemnified by the Bank from all losses and expenses incurred by him in or about the discharge of his duties, other than such losses and expenses as the Board may deem to have been occasioned by his misconduct or willful default.

27. No director or employee of the Bank to guarantee loans.

No director, or employee of the Bank shall guarantee the repayment of any loan granted by the Bank to any other person.

28. Restrictions on loans to directors.

No loan shall be granted by the Bank to any director or employee of the Bank or to the spouse or a dependent child of a director or employee or to any company or firm in which a director or employee has a substantial interest:

Provided however that the Bank may grant to its employee loans for the purchase of land for the construction of a dwelling house or for the purchase, construction, repair, renovation of or any extension to a dwelling house or for any other purpose prescribed by the rules made under this Law.

[S 28 proviso subs by s 3 Act 10 of 1994.]

29. Declaration of auditor.

Every director General Manager, secretary, adviser, employee, secrecy member of agency, accountant or other person employed in the business of the Bank shall, before entering upon his duties, sign a declaration pledging himself to observe strict secrecy respecting all transactions of the Bank, its customers, and the state of accounts with any person and all matters relating thereto and shall by such declaration pledge himself not to reveal any matters which may come to his knowledge in the discharge of his duties except—

(a) when required to do so—

(i) by the Board, or

(ii) by a court of law, or

(iii) by the person to whom such matters relate;

(b) in the performance of his duties; and

(c) in order to comply with any of the provisions of this Law or any other law.

30. Right to refuse to answer questions.

Every director, General Manager, auditor, secretary, adviser, and other employee of the Bank shall decline to answer any questions concerning the business of the Bank which may be put to him on any occasion whatsoever, if he considers that the answer to such question would disclose or tend to disclose the secrets of the Bank or the business or affairs of any customer of the Bank, except in circumstances specified in the preceding section.

PART III

BUSINESS

31. Kinds of business the Bank is authorised to carry on and transact.

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VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


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NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


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VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


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