National Bank of Pakistan (NBP) Ordinance, 1949

Exact source transcription retained, including print layout and extraction artifacts. Text SHA-256: f33ead9ac3a15547e2e1465d0cc60ae098184fb231c31276d7bf0f1bb080e4cc.

Page 1 of 17 
 
 
THE NATIONAL BANK OF PAKISTAN ORDINANCE, 1949 
 
 
 
 
 
 
CONTENTS 
 
PREAMBLE 
 
CHAPTER I 
PRELIMINARY 
 
1.  Short title, extent and commencement.   
2.  Definitions. 
 
CHAPTER II 
ESTABLISHMENT, INCORPORATION AND SHARE CAPITAL OF THE NATIONAL BANK 
OF PAKISTAN 
 
3.  Establishment and incorporation of the Bank.   
4.  Share Capital. 
 
CHAPTER III 
SHARES 
5.  Nature of shares.  
 
6.  Principal register of shareholders. 
 
7.  Branch registers.  
 
8.  Qualifications of shareholders.  
 
9.  Federal Government a shareholder.  
 
10.  No notice to be taken of trusts. 
 
CHAPTER IV 
MANAGEMENT 
 
11.  Head Office of the Bank. 
 
12.  Central Board. 
 
13.  Local Boards.  
 
14.  Constitution of the Central Board.  
 
15.  Constitution of Local Boards.  
 
 

 
Page 2 of 17 
 
16. Managing Director and Deputy Managing Directors. 
 
17.  Qualifications and disqualifications of Directors and Members.  
 
18.  Removal of Directors and Members.   
19.  [Omitted.]  
 
20.  Terms of office of Directors and Members.  
 
21.  Vacancies.  
 
22.  General and Special Meetings.  
 
23.  Local and special local meetings.  
 
24.  Votes of shareholders.  
 
CHAPTER V 
 BUSINESS OF THE BANK 
 
25.  Business which the Bank is authorised to transact.   
26.  Business which the Bank is not authorised to transact. 
 
26 A.  Exceptions. 
CHAPTER VI 
MISCELLANEOUS   
27.  Auditors. 
 
28.  Government Auditors.  
 
29.  Rights and duties of auditors.  
 
30.  Acceptance of liabilities.  
 
31.  Liquidation of the Bank.  
 
32.  Power of the Central Board to make bye laws.  
 
33. [Omitted.] 
 
Page 3 of 17 
 
THE NATIONAL BANK OF PAKISTAN ORDINANCE, 1949 
1ORDINANCE NO. XIX OF 1949 
[9th November, 1949] 
An Ordinance to constitute a National Bank of Pakistan. 
WHEREAS an emergency has arisen which renders it neces sary to extend banking facilities 
generally and also to provide credit for agriculture and agricultural produce; 
NOW, THEREFORE, in exercise of the powers conferred by section 42 of the Government of 
India Act, 1935  (26 Geo.5,c.2.) , the Governor -General is pleased to make and promulgate the 
following Ordinance:___ 
 
CHAPTER I 
 PRELIMINARY 
 
1. Short title, extent and commencement. —(1) This Ordinance may be called the National 
Bank of Pakistan Ordinance, 1949. 
 
2[(2) It extends to the whole of Pakistan.]  
 
(3) It shall come into force at once. 
2. Definitions. ___In this Ordinance, unless there is anyth ing repug nant in the subject or 
context,— 
(a)  “the Bank ” means the National Bank of Pakistan constituted by this 
Ordinance; 
 
(b)  “the Central Board” means the Central Board of Directors of the Bank; 
 
(c)  “Local Board” means a Local Board of Members at Karachi, Dacca or Lahore; 
 
(d)  “Director” means a Director for the time being of the Central Board; 
 
(e)  “Member” means a Member for the time being of a Local Board; 
(f)  “dividend” includes bonus; 
 
(g)  “goods” includes bullion, wears and merchandise;  
 
(h)  “general meeting” means the annual meeting of the shareholders of the Bank; 
 
(i)  “local meeting” means the annual meeting of the shareholders whose names 
are registered in a branch register; 
 
(j)  “meeting” includes an adjourned holding of a meeting; 
 
 1 The Ordinance has been applied__ 
(i) to Baluchistan, with effect from the 9th day of November, 1949, see Gaz. of P., 1952, Pt. I, p. 150; 
(ii) in the Federated Areas of Baluchistan, see ibid., 1953, Part I, p. 152; and 
(iii) extended to the Leased Areas of Baluchistan, by the Leased Areas (Laws) Order, 1950 (G. G. O. 3 of 1950). 
It has also been extended to___ 
(a) the State of Bahawalpur, subject to certain modifications, see the Bahawalpur (Federal Laws) (Extension) Order, 1952 (G. G. O. 11 of 1952); 
(b) the Baluchistan States Union, see the Baluchistan States Union (Federal Laws) (Extension) Order, 1953 (G. G. O. 4 of 1953); and 
(c) the Khairpur State, seethe Khaipur (Federal Laws) (Extension) Order, 1953 (G. G. O. 5 of 1953). 
The Act has been and shall be deemed to have been brought into force in Gwadur with effect from the 8th September, 1958, by the Gwadur 
(Application of Central Laws) Ordinance 1960 (37 of 1960), s. 2. 
The Acts/Ordinance and the rules, notifications and orders made thereunder, have been applied to the whole of the Federally Administered Tribal Areas 
or to the parts of those Areas to which they do not already apply, by Regulation No. I of 1975, s. 2 and the Schedule. 
The Act/Ordinance and the rules, notifications and or der made thereunder, as in force in N.W.F.P. before the 15 th July, 1975, have been applied to the 
Districts of Chitral, Dir, Swat and Malakand Protected area of the N.W.F.P. by Regulation No. III of 1975, s. 2 and the Sch. 
2 Subs. by the Central Law s (Statute Reform) Ordinance, (21 of 1960), s. 3., and 2nd Sch., for the original sub -section (2) ( with effect from the 14th 
October, 1955). 
 
Page 4 of 17 
 
(k)  “prescribed” means prescribed by bye-laws made under this Ordinance; 
 
1[(1)  “Managing Director” means the Managing Director of the Bank;] 
 
(m)  “special meeting” means a meeting of the shareholders of the Bank convened 
for transacting some particular business specified in the notice convening the 
meeting; 
 
(n)  “special local meeting” means a meeting of the sharehol ders whose names are 
registered in a branch register, convened for transacting some particular 
business specified in the notice convening the meeting; 
 
(o)  “special resolution” means a resolution passed at a special meeting; and 
 
(p)  “special local resolution” means a resolution passed at a special local meeting. 
 
CHAPTER II 
ESTABLISHMENT, INCORPORATION AND SHARE CAPITAL OF THE NATIONAL BANK 
OF PAKISTAN 
 
3. Establishment and incorporation of the Bank. ____(1) As soon as may be after the 
commencement of this Ordinance, there shall be constituted in accordance with the provisions of this 
Ordinance a bank to be called the National Bank of Pakistan to carry on the business of banking. 
 
(2) The Bank shall be a body corporate having perpetual succession and a co mmon seal, and 
shall by the said name sue and be sued. 
 
4. Share Capital. ___(1) Subject to the provisions of this Ordinance the authorised 2[Capital] 
of the Bank shall be 3[such as the Federal Government, may by notification in the official Gazette, 
specify and the amount so specified shall be divided into] 4[Ordinary shares of ten] rupees each. 
 
(2) Out of the said capital there shall, from time to time, be issued such number of shares and 
on such terms, if any, including the terms of brokerage and underwr iting, as the Ce ntral Board may 
decide 5[.] 
 
 6*  *  *  *  *  *       * 
 
(3) The liability of the shareholders of the Bank shall be limited to the amount not fully paid 
up on their shares. 
 
(4) The shareholders of the Bank may, subject to the sanction of t he 7[Federal Government], 
8* * * by special resolution, increase or reduce the capital of the Bank. 
CHAPTER III 
SHARES 
 
5. Nature of shares.___The shares of the Bank shall be movable property and each share shall 
be distinguished by its appropriate number. 
 
6. Principal register of shareholders. ___The Bank shall maintain at its Head Office 
established under section 11 a register, to be called the principal register, of all shareholders of the 
Bank, and shall enter therein such particulars as may be prescribed. 
 
1 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 2, for the original cl. (1). 
2 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 3, for “share capital”. 
3 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1981 (42 of 1981), s. 2, for “[three crores] or rupees divided into thirty lakh” The words in 
crotchets were subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s., 3, for “six crores”. 
4 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1971), s. 2, for “six hundred thousand Ordinary shares of fifty”. 
5Subs. by Ord. 52 of 1960, s. 3 for the colon. 
6 Proviso omitted ibid. 
7 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
8 The original words “and subject to the provision of the proviso to sub-section (2),” omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1960 
(52 of 1960), s. 2. 
 
Page 5 of 17 
 
7. Branch registers. ___(1) The Bank shall cause to be main tained at the offices of its Local 
Boards branch registers of the shareholders qualified and entitled to be registered therein, containing 
such particulars as may be prescribed. 
 
(2) Subject to the provisions of this Ordinance shares shall be transferable from one branch 
register to another. 
 
8. Qualifications of shareholders. ___(1) No person shall be qualified to be registered as a 
shareholder who by reason of anything contained in any law for the time being in force is not 
competent to enter into any contract.  
 
(2) A person who subsequent to his registration, is dis covered to have been not qualified as 
aforesaid at the time of registration shall not be entitled to exercise any of the rights of a shareholder 
otherwise than for the purpose of the sale of his shares under the orders of a competent Court. 
 
(3)  (a)  A shareholder shall be entitled to be registered in any area defined in 
 sub-section (5) in which he ordinarily res ides or has his principal place of 
 business. 
 
(b)  A shareholder  who neither res ides nor has a place of business in the areas 
defined in sub -section (5) shall be registered in such branch register as the 
Central Board 1[may from time to time].  
(c)  No person shall be registered as a shareholder in more than one branch  
register. 
 
2[*  *  *  *  *  *        *] 
 
3[(5) The area served by the branch register maintained at Karachi shall consist of the 4[the 
Provinces of Sind and Baluchistan including the Provincially Administered Tribal Areas; 5[and] the 
area served by the br anch register maintained at Lahore shall consist of the Provinces of the Punjab 
and North West Frontier including the Provincially Administered Tribal Areas, 5[and] the Islamabad 
Capital Territory and the 6[Federally] Administered Tribal Areas] 5[*   * *]. 
 
9. Central Gov ernment a shareholder. ___Notwithstanding anything contained in section 8, 
the Central Government shall be a shareholder of the Bank and shall purchase at par not less than 
twenty-five percent of the shares issued by the Bank from time to time. 
 
10. No notice to be taken of trusts.___No notice of any trust, express, implied or constructive 
shall be entered on the principal or any branch register or be receivable by the Bank. 
 
 
CHAPTER IV 
 MANAGEMENT 
 
 
11. Head office of the Bank.___The Head Office of the Bank shall be at Karachi. 
 
12. Central Board. ___The general superintendence and direction of the affairs and business 
of the Bank shall be entrusted to the Central Board which may exercise all powers and do all such 
acts and things as may be exercised or don e by the Bank and are not by this Ordinance expressly 
directed or required to be done by the Bank in general meeting. 
 
13. Local Boards. ___7[Two] Local Boards shall be established for the areas mentioned in 
sub-section (5) of section 8, one  each at 8[Karachi] and Lahore, and shall without prejudice to the 
powers conferred by section 12, have power, within the prescribed limits, generally to transact all the 
usual business of the Bank. 
 
1 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 4 for certain original words. 
2 Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and Sch. II. 
3 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 4, for the or iginal sub-section (5), as amended by the Federal Laws 
(Revision and Declaration), Act, 1951 (26 of 1951), and the Central Laws (Statute Reforms), Ordinance, 1960 (21 of 1960). 
4 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 2. 
5 Ins. and omitted by F.A.O., 1975, Art. 2 and Sch. 
6 Subs. ibid., Art. 2 and Table. 
7 Subs. by F.A.O., 1975, Art. 2 and Sch., for “three”. 
8 Subs. ibid., for “Karachi, Dacca”. 
 
Page 6 of 17 
 
 114. Constitution of the Central Board. ___(1) The Central Board shall consist of t he 
following Directors, namely:___ 
(a)  the Managing Director appointed by the 2[Federal Government] under section 
16; 
 
3[(b)  four Directors elected in local or special local meetings by the shareholders i n 
such manner that the shareholders  registered in a branch reg ister maintained 
for an area mentioned in sub -section (5) of section 8 shall elect from amongst 
themselves such number of Directors for that area as may be decided before 
election by the Central Govern ment having regard to the proportion w hich the 
share capital subscribed by the shareholders of that area bears to the whole: 
 
 Provided that the Federal Government may, at any time, by order in writing, direct that, for 
such period as may be specified in the order, no Director Shall be elected  for any area so  specified, 
and, where it makes such an order, shall allocate to the other areas the seats of the Directors who 
would have been elected for that area had no such order been made;] 
 
4[(c)  Five Directors appointed by the Federal Government:] 
 
(2)  The 4[Chairman] of the Central Board shall be appointed by the 5[Federal 
Government] from amongst the Directors. 
 
15. Constitution of Local Boards. ___A Local Board shall consist of  the following members, 
namely:___ 
 
(a) the Managing Director 6[* * *]: 
 
Provided that in the event of the inability of 7[Managing Director] to attend the 
meeting of a Local Board  8[he] may nominate an officer of the Bank to attend 
as an ex-officio Member; 
 
(b)  one Member appointed by the Central Board from amongst the Direc tors 
elected by the shareholders registered in the branch register of that area; 
 
(c)  two Members appointed by the 5[Federal Government] from the area in which 
the Local Board is established; 
 
(d)  9[three] Members elected in a local or special local me eting from among st 
themselves by the shareholders registered in the branch register of that area. 
 
16. Managing Director and Deputy Managing Directors. ___10[(1) The Managing Director 
shall be appointed by the 2[Federal Government] for a period not exceedin g 11[five] years and on 
such salary and terms and conditions of service as the 2[Federal Government] may determine: 
 
Provided that neither the salary nor the terms and conditions of service shall be varied to his 
disadvantage during his tenure of office 12[ : ]] 
 
 
 
 
1 For notification under this section, see Gaz. of P., 1953, Ext., p. 299. 
2 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
3 Subs. ibid., s. 3. 
4 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 3. 
5 Subs. ibid., s. 6, for “Central Government”. 
6 The original words “or a Deputy Managing Director” omitted by the National Bank of Pakistan  (Amdt.) Ordinance, 1960 (52 of 1960), s. 6. 
7 Subs. ibid., for “either of them”.  
8 Subs. ibid., for “the Managing Director”. 
9 Subs. ibid., s. 6, for “two”. 
10 Subs. by the National Bank of Pakistan Ordinance (Amdt.) Act, 1953 (29 of 1953), s. 2 for the original sub-section (1).  
11 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 7, for “three”. 
12 Subs. ibid., for full-stop. 
 
Page 7 of 17 
 
 1[Provided further that the appointment may be terminated by six months’ notice in writing 
given by the 2[Federal Government] to him or by him to the 2[Federal Government.] 
 
3[*  *  *  *  *  *       *] 
 
(3) The Managing Director 4[* * *] shall on the expiry of 5[his term] of office be eligible for 
re-appointment: 
 
 Provided that no person shall hold office as Managing Director 6[* * *] who is a member of 
the 7[Federal] or a Provincial Legislature. 
 
8[(4) The Managing Director shall be the chief executive officer of the Bank and shall, 
subject to any bye -laws made in this behalf, direct and control, on behalf of the Central Board, the 
affairs of the Bank.].  
 
17. Qualifications an d disqualifications of Directors and Members. ___(1) No person not 
appointed by the 2[Federal Government] to serve as a Director or Member shall be qualified to serve 
as a Director or Member unless he is a holder in his own right of unencumbered shares of the Bank 
to the nominal amount of ten thousand rupees at the least. 
 
(2)  No person shall be qualified to serve as a Director or Member___  
9[*  *  *  *  *  *       *] 
10[*] 
 
(b)  if he is a salaried officer of any Government 11[,whether within or without 
Pakistan, and is ] not authorised by the 2[Federal Government ] to serve as a 
Director or Member 12[;] 
 
13[(c)  if he has been convicted of an offence involving moral turpitude; 
 
 (d)  if he was at any time in the service of the Bank and was dismissed or his  
services had been terminated by the bank; 
 
(e)  if he is a Director of any commercial bank other than a bank sponsored or 
established by or under the authority of the 2[Federal Government] or the State 
Bank of Pakistan for the development of industry or agriculture in the country, 
or a bank which is a society registered under the Co operative Societies Act, 
1912 (Act II of 1912)  or any other law for the time being in force in Pakistan 
relating to co-operative societies; 
 
(f)  if he is in the employment of  any banking com pany, whether on salary or on 
commission, or is engaged in the performance of any continuous service for 
remuneration for any such company; 14* 
 
 
 
 
1 Second proviso added . by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960 ), s.7 
2 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
3 Sub-section (2) omitted ibid. 
4 The original words “and Deputy Managing Director” omitted ibid. 
5 Subs. ibid. for “their respective terms”. 
6 The original words “or Deputy Managing Director” omitted ibid. 
7 Subs. by F.A.O., 1975, Art. 2 and Table, for “Central”. 
8 Added by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 3. 
9 The original cl. (a) omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1962 (61 of 1962), s. 2. 
10 The original word “or” omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 8. 
11 Subs. ibid., “in Pakistan”. 
12 Subs. ibid., for full-stop. 
13 New cls. (c) to (g) added, ibid. 
14 Omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 4. 
 
Page 8 of 17 
 
1[(g)  if he is for the time being disqualified for mem bership of any body established 
by or under any law (P.O 13  of 1959) for the time being in force of which the 
Constituent members are wholly or partly chosen by means of election 2[;] 
 
2[(h) if having been a Director or Member, his office as such has been vacated, or 
deemed to be vacated under the provisions of clause (h) of sub-section (3); or  
 
(i)  If he has vacat ed his office as Director or, as the case may be, Member under 
clause (i) of sub-section (3) unless a period of three years has elapsed since the 
date he so vacated his office.]. 
 
(3)  The office of a Director or Member shall be vacated___ 
 
(a)  if the person holding it resigns his office or dies; 
 
(b)  if he accepts or holds any other office of profit under the Bank; 
 
(c)  if he is, or at any time has been, adjudicated an insolvent, or compounds with 
his creditors or suspends payment; 
(d)  if he is found lunatic, or becomes of unsound mind; 
 
(e)  if he has absented himself from three consecutive meetings of the Central or a 
Local Board, as the case may be, or from all such meetings for a continuous 
period of six months, whichever is longer, without leave of  absence from the 
Board concerned; 3[*] 
 
(f)  if he ceases to hold in his own right the amount of shares required to qualify 
him for the office 4[;] 5[*] 
 
6[(g)  if he incurs any of the disqualifications mentioned in sub-section (2) 7[;] 
 
8[(h)  if, in relation to the Bank he has failed to pay any advance, loan or credit limit 
or any installment thereof or interest thereon, or any amount due on any 
guarantee, or to do or perform any act agreed or undertaken in writing to be 
done or performed  by him, and suc h failure continues for a period of one 
month after notice in writing has been served on him by the Bank calling upon 
him to make the payment or to do or perform the act; or 
 
(i) if he has been a Director or Member for a continuous period of si x years from 
the date when he was first elected as such Director or Member or, as the case 
may be, was appointed by name and otherwise than by designation of office, 
as such Director or Member.] 
 
 9[Explanation.___ In computing the period of six years for the purpose of this clause any break 
of less than three years in the continuity of office shall be disregarded.]. 
 
(4) No two persons who are partners of the same mercan tile firm, or who are directors of the 
same private company, or one of whom is the gen eral agent of, or holds a power of procuration from 
the other or from a mercantile firm of which the other is a partner, shall be eligible or qualified to 
serve as Directors of the Central Board, or as Members of the same Local Board at the same time  
10[:] 
 
1 Subs. by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and II Sch. 
2 Subs. and added by Ord. 14 of 1970, s. 4. 
3 The original word “or” omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 8. 
4 Subs. ibid., for full-stop.  
5 The word “or” which was added ibid., have been omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 4. 
6 Cl. (g) added ibid. 
7 Subs. by Ord. 14 of 1970, s. 4. 
8 Added, ibid. 
9 Added by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 4. 
10 Subs. omitted and added by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 4. 
 
Page 9 of 17 
 
1[*  *  *  *  *  *       *] 
 
 1[(5) Nothing in sub-section (1), or in clause (b) of sub-section (2), or in clauses (b) and (i) of 
sub-section (3) shall apply to the Managing Director or an officer nominated by the Managing 
Director or an officer nominated by the Managing Director under the proviso to clause (a) of section 
15.]. 
 
 18. Removal of Directors and Me mbers.___(1) The shareholders may, by a special 
resolution passed by the votes of shareholders holding in the aggregate more than one half of the 
paid-up capital for the time being, removed any Director, other than a Director appointed by t he 
2[Federal Gov ernment], before the expiration of his period of office, and appoint in his stead a 
qualified person who shall hold office subject to sub-section (2) of section 21. 
 
(2) The shareholders on a branch register may, by a special local resoluti on passed by the  
votes of shareholders holding in the aggregate more than one half of the paid -up capital for the time 
being on the branch register concerned, remove any Mem ber, other than a Member appointed by the 
2[Federal Government] or the Central Bo ard of the Local  Board concerned, before the expiration of 
his period of office, and appoint  in his stead a qualified person who shall hold office subject to 
sub-section (2) of section 21. 
 
(3) Directors and Members appointed by the 2[Federal Government] a nd the Central B oard 
may be removed and replaced by other Director and Members at the discretion of the appoint ing 
authorities concerned. 
 
 19. [First Constitution of the Central and Local Boards.] Omitted by the National Bank of 
Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 9. 
 
 
 20. Terms of office of Directors and Members. ___(1) 3[At every general meeting] one third 
of the 4[elected] Directors and Members for the time being, or if their number is not three or a 
multiple of three then the number near est to one third , shall retire from office 5[; but  the retired 
Director or Members shall, subject to the provisions of section 17, be eligible for re-election]. 
 
 (2) The Directors and Members to retire at every general 6[* *] meeting shall be those who 
have been longest in office, and as between those Directors and Members who are to retire and who 
have been in office for an equal length of time the Director and Member to retire shall in default of 
agreement amongst themselves be determined by lot, the len gth of time a Di rector or Member has 
been in office being subject to subsection (2) of section 21, computed from his last election. 
7[*  *  *  *  *  *       *] 
 
 8[(3) A Director or Member appointed by the Federal Government, other than the Managing 
Director, shall hold office during the pleasure of the Federal Government. 
 
(4) A Member appointed by the Central Board shall cease to hold office when he ceases to be 
a Director.] 
 
21. Vacancies.____ (1) Any vacancy occurring on the Central or a Local Board by  the death, 
resignation 9[, removal] or disqualification of any Director or Member shall be filled by the 
remaining Directors or Members, as the case may be, who shall co -opt a duly qualified person to fill 
the vacancy: 
 
1 Subs. omitted and added by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 4. 
2 Subs. by Act 11 of 1973, s. 6, for “Central Government”. 
3 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 10, for certain original words. 
4 Ins. by the National Bank of Pakistan Ordinance (Amdt.) Act, 1953 (29 of 1953), s. 3.  
5 Added by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 5. 
6 The original words “and local” omitted by Ordinance 52 of 1960, s. 10. 
7 Sub-section (2A) which was originally inserted by Ord. 52 of 1960, s. 10 have been omitted by Ord. 14 of 1970, s. 5. 
8 The original sub-section (3) which was subs. by Ord. 14 of 1970, s. 5 has been subs. by the National bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), 
s. 5. 
9 Ins. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 11. 
 
Page 10 of 17 
 
 Provided that where a vacancy occurs in the office of a Director or Member appointed by the 
1[Federal Government] or the Central Board, the vacancy shall be filled only by a ppointment by the 
1[Federal Government] or the Central Board, as the case may be. 
 
(2) Any Director or Member so 2* * appointed shall be deemed to have held office from the 
date on which the Director or Member in whose place he is 2[* *] appointed was 3[* *] appointed, or, 
when such Director or Member was co -opted or appointed under this sub -section, from the date on 
which his mediate or immediate predecessor was 2[* *] appointed, as the case may be. 
 
4[(3) Any Director or Member co -opted under sub -section (1) shall ret ire at the next general 
or local meeting, as the case may be, and the vacancy so occurring on the Central or a Local Board 
shall be filled by election as provided in clause (b) of sub -section (1) of section 14 or clause (d) of 
section 15, as the case may be.] 
 
22. General and Special meetings.___(1) In the first week of March in every year, or as soon 
thereafter as is convenient, a general meeting shall be held annually in rotation at the towns where 
the Local Boards are established, at suc h time as may be determined by the Central Board and at the 
meeting the 5[shareholders present shall be entitled to discuss the annual account, the report of the 
Central Board on the working of the Bank throughout the year, and the auditors report on the a nnual 
balance sheet and accounts, made up to the preceding thirty-first day of December]. 
 
Provided that the first general meeting shall be held at Karachi. 
 
 (2) Special meetings shall be convened and held in such manner and at such time and place as 
may be prescribed. 
 
 23. Local and special local meetings. ___Local and special local meetings shall be convened 
and held in such manner and at such time and place as may be prescribed. 
 
 24. Votes of shareholders. ___(1) Every shareholder shall be entitled to a ttend any meetin g 
and each shareholder who has been registered as such for a period of not less than three months prior 
to the date of such meeting shall when present in person and on a show of hands, have one vote; and 
on a poll each shareholder so regis tered for a like  period shall have one vote for every ten shares           
6[, subject to a maximum of  7[ten] votes]: 
 
 Provided that no shareholder shale be entitled to vote at any meeting unless all calls or other 
sums presently payable by him in respect of shares of the Bank have been paid. 
 
8[(2) On a poll votes may be given either personally or by proxy , but the 4[Federal 
Government], as a shareholder may appoint any person to be present at any general meeting and to 
vote on its behalf.]. 
CHAPTER V 
BUSINESS OF THE BANK 
25. Business which the Bank is authorised to transact. ___The Bank is authorised to carry 
on and transact the 13 several kinds of business hereinafter specified, namely:___ 
(1) the advancing and lending of money, and opening of cash-credits upon the security of___ 
 
(a)  stocks, funds and securities 9[* * * ] in which a trustee is authorised to invest 
trust money by any law for the time being in force in Pakistan and shares of 
the State Bank of Pakistan; 
 
1 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
2 The original words “co-opted or” omitted by Ordinance, 52 of 1960, s. 11. 
3 The original words “elected or” omitted ibid. 
4 Sub-section (3) added, ibid. 
5 Subs. ibid., s. 12, for certain original words. 
6 Ins . by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960 ), s.13 
7 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 6 for “fifty”. 
8Sub-section (2) subs. Ibid. 
9The original brackets and words “(other than immoveable property)” omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1960, (52 of 1960), 
s. 14. 
 
Page 11 of 17 
 
(b)  debentures or other securities for money issued under the authority of any law 
or a time being in force in Pakistan by, or on behalf of, a port trust authority or 
a district board or a municipal board or committee 1[* * *]; 
 
(c)  goods which, or the documents of title to which, are deposited with, or 
assigned to, the Bank as security for such advances, loans or credits; 
 
(d)  subject to such dire ctions as may be issued by the Central Board, debentures 
of companies with limited liability; 
 
(e)  shares of companies with limited liability, in accordance with such directions 
in this regard as may be issued from time to time by the Stat e Bank of 
Pakistan; 
 
(f)  goods which are hypothecated to the Bank as security for such advances, loans 
or credits 2[* * *]; 
(g)  accepted bills of exchange and promissory notes endorsed by the payees and 
joint and several promissory notes of two or more p ersons or firms 
unconnected with each other in general partnership; 3[*] 
 
4[(h)  immovable property or documents of title re lating thereto, subject to such 
directions as may be issued by the Central Board;] 
 
5[(i)  subject to such directions as may be issued by the Central Board, tea crops;] 
 
 Provided that any advances or loans which are guaranteed by the 6[Federal Government] or 
any Provincial Government in Pakistan may be made without any specific security; 
 
(2) the selling and realisation of proceeds of s ale of any such promissory notes, 
debentures, stock receipts, bonds, annuities, stocks, shares, securities or goods which, or the 
documents of title to which, have been deposited with, or pledged, hypothecated, assigned or trans -
ferred to, the Bank as secu rity for such ad vances, loans or credits or which are held by the Bank or 
over which the Bank is entitled to any lien or charge in respect of any such advance or loan or credit 
or any debt or claim of the Bank, and which have not been redeemed in due time in accordance with 
the terms and conditions (if any) of such deposit, pledge, hypothecation, assignment or transfer; 
 
(3) the advancing and lending of money to Courts of Wards upon the security of estates in 
their charge or under their superintendence and  the realisation of such advances or loans and any 
interest due thereon: 
 
Provided that no such adv ance or loan shall be made with out the previous sanction of the Provincial 
Government concerned; 
 
(4) the drawing, accepting, discounting, buying and sellin g of bills of ex change and other 
negotiable securities; 
 
7[(5)the investing of the funds of the Bank in  or the underwriting of, any stocks, funds, 
shares, securities, debentures, bonds or scripts or other securities for money issued by any public 
limited company or any co rporation established by or under any law for the time being in force or 
under the authority of the 6[Federal Government] or the State Bank of Pakistan, and converting the 
same into money when required, and altering, converting and transpos ing any such investment for or 
into any other of such investments;]  
 
 
1 Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (27 of 1981), s. 3 and II Sch. 
2 The original comma and words “, if so authorised by special directions of the Central Board” omitted by Ordinance, 52 of 1960, s. 14. 
3 The original word “and” omitted by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 14. 
4 Subs. ibid., for the original sub-clause (h). 
5 New sub-clause (i) added, ibid. 
6 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
7 Sub-section (5) which was previously amended by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 14 have be en subs. by the 
National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 7. 
 
Page 12 of 17 
 
(6) the issuing of letters of credit; 
 
(7) the buying and selling of gold and silver whether coined or uncoined; 
 
(8) the receiving of deposits and keeping cash accounts on such terms as may be agreed on; 
 
(9) the acceptance of the char ge of plate, jewels, title deeds or other valuable go ods o such 
terms as may be agreed on; 
 
(10) the 1[managing,] selling and realising of all property whether movable or immovable 
which may in any way come into the possession of the Bank in satisfaction or part satisfaction of any 
of its claims, and the acquisition and holding of, and generally the dealing with, any right, title or 
interest in any property movable or immovable which may be the Bank ’s security for any advance or 
loan or may be connected with any such security 2[:] 
 
 3[Provided that the Bank shall not take over the management of any such property except in 
pursuance of an agreement with the debtor or of an order, judgment or decree of a court of competent 
jurisdiction;] 
 
(11) the transacting of pecuniary agency business on com mission and the entering into of 
contracts of indem nity, suretyship or guarantee with specific security or otherwise 4[, and the 
under-writing, participating in, and carrying out o f the issue of a ny stock, shares, debentures and 
other securities]; 
 
(12) the administration of estates for any purpose whether as an executor, trustee or otherwise 
and the acting as agent on commission in the transaction of the follow ing kinds of busines s, 
namely:___ 
 
(a)  the buying, selling, transferring and taking charge of any securities or any 
shares in any public company; 
 
(b)  the receiving of the proceeds whether principal, interest or dividends, of any 
securities or shares; 
(c)  the remittance of such proceeds by public or private bills of exchange, payable 
either in Pakistan or elsewhere; 
 
(13) the drawing of bills of exchange and the granting of letters of credit payable out of 
Pakistan; 
(14) the buying of bills of exchange payable out of Pakistan; 
 
(15) the b orrowing of money for the purpose of the Bank ’s business, and the giving of 
security for money so borrowed by pledging assets or otherwise; 
(16) the paying, receiving, collecting and remitting money, bullion and securities under any 
agreement with the Stat e Bank of Pakistan as its agent on behalf of any Government in Pakistan, or 
undertaking and tran sacting any business which the State Bank of Pakistan may from time to time 
entrust to it; 
 
(17) the establishing and discontinuing of branches and agencies; 
 
(18) the acquiring, maintaining and transferring of the Bank ’s residential and business 
premises; 
 
(19) the taking over of the business, including the capital assets and liabilities of any other 
bank, with the sanction of the 5[Federal Government]; 
 
1 Ins. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 14. 
2 Subs. ibid., for semi-colon. 
3 Proviso added ibid. 
4 Added by the National Bank of Pakistan (Amdt.) Ordinance, 1962 (61 of 1962), s. 3. 
5 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
 
 
Page 13 of 17 
 
(20) the granting of advances or loans to any other bank for the purpose of averting or 
facilitating its winding up; 1[*] 
 
2[*  *  *  *  *  *       *] 
3[(21) with the previous permission in writing of the State Bank of Pakistan,___ 
 
(a)  the investing of the funds of the Bank in any bank incorporated outside 
Pakistan, and 
 
(b)  participating in the management and administration of any such bank in which 
the funds of the Bank have been invested; and] 
 
(22) generally, the doing of all such matters and things as may be incidental or subsidiary to 
the transacting of the various kinds of business including foreign ex change business hereinbefore 
specified. 
 
 26. Business which th e Bank is not au thorised to transact. ___The Bank shall not transact 
any kind of banking business other than those specified in section 25, and in particular___ 
 
4[(1) the Bank shall not make any advance or loan upon the security of its shares;] 
 
5[* * * * * * *] 
(2) the B ank shall not discount or buy or advance or lend to any individual or 
partnership-firm an amount exceeding in the whole at any one time such sum as may be prescribed; 
 
(3)  the Bank shall not discount or buy or advance or lend or open cash-credits on the security 
of any negotiable instrument of any individual or partnership -firm, payable in the town or at the 
place where it is pre sented for discount, which does not carry on it the several responsibilities of at 
least two persons or firms unconnected with each other in general partnership: 
 
Provided that nothing in this section shall be deemed to prevent the Bank from 6[granting overdrafts 
and loans], without security, to such extent as may be prescribed 7[;] 
 
7[(4) the Bank shall not grant t o any person who  has been elected or appointed as a Director 
or Member and for so long as he continues to hold that office any advance, loan, credit limit, 
guarantee or other facilities, or alter to his advantage the terms and conditions of any advance, lo an, 
credit limit, guarantee or other facilities granted before his election or appointment as a Director or 
Member : 
 
 Provided that nothing in this clause shall prevent the Bank from continuing  or renewing any 
such advance, loan, credit limit, guarantee or other facilit ies as may have already been granted to 
such person before his election or appointment as a Director or Member.]. 
 
8[26A. Exceptions ___Notwithstanding anything contained in sections 25 and 26 the Bank is 
authorised to___ 
(1) grant advances or loans to its officers and staff for the purpose of building residential 
houses, including the cost of land, on such security, including immovable property, and on such 
terms and conditions and for such periods as may be prescribed; 
1 The word “and” whic h was added by t he National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 14, has been omitted by the National   
Bank of Pakistan (Amdt.) Ordinance, 1963 (5 of 1963), s. 2. 
2 The original cl. (21) omitted by Ordinance 52 of 1960, s. 14 
3 New cl. (21) ins. by the National Bank of Pakistan (Amdt.) Ordinance, 63 (5 of 1963), s. 2. 
4 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 8. for original sub-section. (1) 
5 The original sub-clause (c)  omitted, by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 15. 
6 Subs. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 15, for “allowing any person who keeps an account with the Bank of 
overdraw such account”. 
7 Subs. and added by the National Bank of Pakistan (Amdt.) Ordinance, 1970 (14 of 1970), s. 8. 
8 Subs. ibid., s. 16, for section 26A which was ins. by the National Bank of Pakistan Ordinance (Amdt.) Act, 1953 (29 of 1953), s.4. 
 
 
Page 14 of 17 
 
1[(1a) grant advances or loans, or any period e xceeding one yea r but not exceeding 
five years, to such small and medium industries as may, from time to time, be 
specified by the Central Board on such terms and conditions as may be 
prescribed: 
 
 Provided that the amount of advances and loans outstand ing at any time un der this clause 
shall not exceed five percent of the total amount of bank deposits at such time;] 
 
(2)  grant or subsidise, from time to time, pensions, gra tuities, bonuses or other 
funds created for the benefit of its officers and staff or their dependents; 
 
(3) contribute to the promotion of research in banking and allied subjects; and 
 
(4) donate funds for any charitable objects or to any cha ritable institutions or 
societies.] 
 
 
 
CHAPTER VI 
MISCELLANEOUS 
 
27. Auditors.___(1) Not more than two auditors who shall be Registered Accountants shall be 
elected and their remuneration fixed at the general meeting. The auditors may be shareholders, but 
no Director or Member or other officer of the Bank shall be eligible during his continuance in office. 
Any auditor shall be eligible on quitting office for re-election. 
 
(2) The first auditors of the Bank may be appointed and their remuneration fixed by the 
Central Board before the general meeting and if so appointed shall hold office only until the  first 
general m eeting. All auditors elected under this section shall severally be and continue to act as 
auditors until the first general meeting after their respective elections: 
 
Provided that if any casual vacancy occurs in the office of any auditor el ected under this section, the 
vacancy may be filled by the Central Board. 
 
28. Government auditors. ___Without prejudice to anything contained in the fore going 
provisions, the 2[Federal Government] may appoint such auditors as it thinks fit to examine and 
report upon the accounts of the Bank. 
 
29. Rights and duties of auditors. ___(1) Every auditor shall be supplied with a copy of the 
annual balance sheet and statement of profit and loss and it shall be his duty to examine the same, 
with the accounts and vou chers relating t hereto. Every auditor shall have list livered to him of all 
books kept by the Bank, and shall at all reasonable times have access to the books, accounts and 
other documents of the Bank, and may, at the expense of the Bank if appointed by it , and at the 
expense of the 1[Federal Government] if appointed by it, employ accountants or other persons to 
assist him in investi gating such accounts, and may, in relation to Such accounts examine any 
Director, or any Member or any other officer of the Bank. 
(2) The aud itors shall make a report  to the shareholders or to the 2[Federal Government] as 
the case may be, upon the annual balance sheet, the statement of profit and loss and accounts, and in 
every such report they shall state whether, in their opin ion, the balance  sheet and the statement of 
profit and loss are full and fair statements containing the prescribed particulars and properly drawn 
up so as to exhibit a true and correct view of the state of the Bank's affairs, and in case they have 
called for any explana tion or information from the Central Board or a Local Board, whether it has 
been given and whether it is satisfactory. Any such report made to the shareholders shall be read 
together with the report of the Central Board at the general meeting. 
 
30. Acceptance of liabilities  ___The Bank shall accept and honour all liabilities, obligations 
and commitments incurred and made by the Promotors Company, Limited, formed to provide for the 
establishment of the Bank in accordance with the rights and po wers with which that Company, is 
invested by its Memorandum of Association. 
 
1 New cl. (1a) ins. by the National Bank of Pakistan (Amdt.) Ordinance, 1962 (61 of 1962), s. 4. 
2 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government” 
 
Page 15 of 17 
 
 31. Liquidation of the Bank.___Nothing in the Companies Act, 1913 (VII of 1913), shall apply 
to the Bank, and the Bank shall not be placed in liquidation save by order of the 1[Federal Government], 
and in such manner and under such t erms and conditi ons, including the terms as to calls on and 
forfeiture of shares, as the 1[Federal Government] may by its order of liquidation direct. 
32. Power of the Central Board to make bye -laws.___(1) The Central Board may, with  the 
previous approval of the 1[Federal Government], make bye-laws not inconsistent with this Ordinance 
to provide for all matters for which provision is necessary or convenient for the purpose of giving 
effect to the provisions of this Ordinance. 
(2) In particular and without  prejudice to th e generality of the foregoing provisions, such 
bye-laws may provide for all or any of the following matters, namely :___ 
(i)  the maximum amounts which may be advanced or lent to, or for which bills 
may be discounted for or purchased from, any individual o r partnership-firm 
with or without security; 
(ii)  the conditions subject to which alone advance s may be made to Directors, 
Members or 2[*] officers 3[or other staff] of the Bank, or the relative of such 
Directors, Members or officers, 4[or other staff] or  to companies, firms or 
individuals with which or with whom such Directors, Mem bers, officers 4[or 
other staff] or relatives are con nected as partners, directors, managers, 
servants, shareholders or otherwise; 
(ii) the manner in which and the conditions subject to which the Bank may take 
over the business, including the capital, assets and liabilities, of any other 
bank; 
 
(iii) the granting of advances or loans to any other bank for the purpose of averting 
or facilitating its winding up; 
 
(iv) the procedure and manner in  which the capital of the Bank may be increased 
or reduced; 
(vi)  the acquisition, maintenance and transfer of the Bank's residential and 
business premises; 
(vii)  the contents, maintenance, inspection and closure of the principal and branc h 
registers of shareholders; 
(viii)  the books and accounts to be kept at the various offices of the Bank; 
(ix)  the balancing of accounts and ascertainment of profit and loss; 
(x)  the form and manner in which the balance sheet and the statement of profi t 
and loss shall be drawn up;  
(xi)  the determination and payment of dividend and transfer of profits to reserves; 
(xii)  the preparation and transmission of returns to the Registrar of Joint Stock 
Companies and to the 1[Federal Government]; 
(xiii)  the evidentiary value, form, issue and renewal of certificates of shares; 
(xiv)  the calls on shares, the payment of such calls, joint and several liabilities of 
shareholders respect of such calls, the Bank's lien on the manner of its 
enforcement, the application of proceeds of sale; 
1 Subs. by the National Bank of Pakistan (Amdt.) Act, 1973 (11 of 1973), s. 6, for “Central Government”. 
2 The word “other” omitted by the National Bank of Pakistan Ordinance (Amdt.) Act, 1953 (29 of 1953), s. 5. 
3 Ins. ibid. 
4 Ins. by the National Bank of Pakistan Oridnance (Amdt.) Act, 1953 (29 of 1953), s. 5. 
 
 
Page 16 of 17 
 
(xv)  the manner in which and the conditions subject to which shares may be 
allotted, held, transferred and transmitted and generally all matters relat ing to 
the rights and duties of shareholders; 
 
 (xvi)  the manner in which general and special meetings shall be convened and held, 
the quorum thereat, the procedure to be followed at such meetings, the manner 
in which votes may be exercised and the appointment and election of  
Chairmen of such meetings; 
 
(xvii)  the manner in which local and special local meet ings shall be convened and 
held, the quorum thereat, the procedure to be followed at such meetings, the 
manner in which votes may be exercised and the appointment and ele ction of 
Chairmen of such meetings; 
 
(xviii)  the powers exercisable by local and special local meetings; 
 
(xix)  the holding and conduct of elections under this Ordinance; 
 
(xx)  the final decisions on doubts and of disputes regarding the qualifications o f 
candidates, or the validity of elections; 
 
(xxi)  the manner in which meetings of the Central and Local Boards shall be 
convened and held, their quorum, the procedure to be followed at such 
meetings, votes of Directors, Members and ex officio Members and  the 
manner in w hich they may be exercised, and the appointment or and election 
of Chairmen of such Boards; 
 
(xxii)  the effect of vacancies in the Central or Local Boards and of subsequent 
discovery of disqualifications of a Director or Member; 
(xxiii) t he obligations a nd immunities of Directors and Members and their 
remuneration, if any;  
 
(xxiv)  the distribution of business amongst the Directors and Member, and their 
remuneration, if any; 
 
(xxv)  the powers of the Local Boards and the limits within which they shall  
exercise such powers; 
(xxvi)  the delegation of any powers of the Central or Local Boards to committees 
consisting of Direc tors or Members, as the case may be, and the conduct of 
business in such committees; 
(xxvii) the establishment and di scontinuance of branches and agencies in Pakistan or 
elsewhere and the nature and extent of the business any branch or agency may 
transact; 
(xxviii) the recruitment of officers and staff of the Bank including the terms and 
conditions of their service, and the constitution and management of staff and 
superannuation funds for the officers and servants of the Bank; 
(xxix)  the authority to draw, accept, endorse and execute documents on behalf of the 
Bank; 
(xxx)  the provision of common and official seals of th e Bank and the m anner and 
effect of their use; 
(xxxi) the manner and form in which contracts binding on the Bank may be executed; 
 
 
Page 17 of 17 
 
(xxxii) the conduct 1[, institution] and defence of legal proceedings and the manner of 
signing pleadings; 
 
(xxxiii) the addresses of shareholders and the issue and service of notices; 
 
(xxxiv) the service of notice on the Bank; and 
(xxxv) generally, for the efficient conduct of the business, discharge of functions and 
management of the Bank. 
33. [Transitional provisions.] Omitt ed by the Nation al Bank of Pakistan (Amdt.) Ordinance, 
1960 (52 of 1960), s. 18. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Ins. by the National Bank of Pakistan (Amdt.) Ordinance, 1960 (52 of 1960), s. 17.