BANK OF PUNJAB ACT, 1989

Exact source transcription retained, including print layout and extraction artifacts. Text SHA-256: 0e5b6f5c046fbe5a9cad1424cb3edf70dd41e6e5c27323e70d2962c579ec0eeb.

THE BANK OF PUNJAB ACT, 1989 
(XII of 1989) 
CONTENTS 
1.  Short title, extent and commencement 
1-A. Act to override other laws 
2.  Definitions 
3.  Establishment and incorporation of the Bank 
4.  Share capital 
5.  Register of Shareholders 
6.  Qualifications of shareholder 
7.  Government to be shareholder 
8. Head Office of the Bank 
9. Board 
10. Constitution of the Board 
11. President 
12. Qualifications and disqualifications of Directors 
13. Removal of Directors 
14. Terms of office of Directors 
15. Vacancies 
16. General and Special Meetings 
17. Votes of shareholders 
18. Business which the Bank is authorised to transact 
19. Business which the Bank is not authorised to transact 
20. Exceptions 
21. Auditors 
22. Government Auditors 
23. Rights and Duties of Auditors 
24. Liquidation of the Bank 
25. Power of the Board to make bye-laws 
26. Immunity 
TEXT 
1
THE BANK OF PUNJAB ACT, 1989 
(XII of 1989) 
[30th July, 1989] 
An 
Act 
to constitute the Bank of Punjab 
Preamble.– WHEREAS it is expedient to provide for the establishment of a Bank for 
providing banking facilities in the Punjab; 
It is hereby enacted as follows:– 
1.  Short title, extent and commencement. – (1) This Act may be called the 
Bank of Punjab Act, 1989. 
(2) It extends to the whole of the Punjab. 
(3) It shall come into force at once. 
2
[1-A.  Act to override other laws .– This Act shall have effect notwithstanding 
anything contained in any other law for the time being in force.] 
2.  Definitions.– In this Act, unless there is anything repugnant in the subject or 
context,– 
(a) “the Bank” means the Bank of Punjab constituted by the Act; 
(b) “the Board” means the Board of Directors of the Bank; 
(c) “Director” means a Director for the time being of the Board; 
(d) “dividend” includes bonus; 
(e) “goods” includes bullion, wares and merchandise; 
(f) “general meeting” means the annual meeting of the shareholders of the 
Bank; 
(g) “Government” means Government of the Punjab; 
(h) “meeting” includes an adjourned holding of the meeting; 
(i) “prescribed” means prescribed by bye-laws made under this Act; 
(j) “
3
[President]” means the 
4
[President] of the Bank; 
                                                           
1This Act was passed by the Punjab Assembly on 3rd July, 1989; assented to by the Governor of the Punjab on 26th July, 
1989; and, was published in the Punjab Gazette (Extraordinary), dated 30th July, 1989, Pages 41-A to 41-L. 
2Added by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab Gazette (Extraordinary), dated: 2 
April 1991, pp. 849-851, s. 2. 
3Substituted for the  words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 2. 
4Substituted for the words “Managing Director” by the Bank of Punjab (Amendmen t) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 2. 
(k) “special meeting” means a meeting of the shareholders of the Bank 
convened for transacting some particular business specified in the 
notice convening the meeting; 
(l) “special resolution” mea ns a resolution passed at a special meeting; 
and 
5
[(m) * * * * * * * * * * *   ] 
3. Establishment and incorporation of the Bank. – (1) As soon as may be 
after the commencement of this Act, there shall be constituted in accordance with 
the provisions of this  Act a bank to be called the Bank of Punjab to carry on the 
business of banking. 
(2) The Bank shall be a body corporate having perpetual succession and a 
common seal and shall by the said name sue and be sued. 
4.  Share capital. – 
6
[(1) Subject to the provi sions of this Act, the authorized  
capital of the Bank shall be fifty thousand million rupees divided into five thousand 
million ordinary or preference shares of ten rupees each.] 
7
[(2) Out of the authorized capital of the  Bank, shares shall, from time to  
time, be divided into such number of ordinary and preference shares and, be issued 
in such number and own such terms, including the terms of the brokerage and 
underwriting, as the Board may decide.] 
(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 the 
Government, by special resolution, increase or reduce the capital of the Bank. 
(5) The shares of the Bank shall be movable property and each share shall 
be distinguished by its appropriate number. 
5.  Register of Shareholders. – The Bank shall maintain at its Head Office 
established under section 8 a register, to be called the Register of the Shareholders 
of the Bank, and shall enter therein such particulars as may be prescribed. 
6.  Qualifications of shareholder. – (1) No person shall be qualified to be 
registered as 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 discovered 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 sal e 
of his shares under the orders of a competent Court. 
                                                           
5Omitted by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991), published in the Punjab Gazette (Extraordinary), dated: 2 
April 1991, pp. 849-851, s. 3. 
6Substituted by the Punjab Finance Act 2010 (VI of 2010), published in the Punjab Gazette (Extraordinary), dated : 28 June 
2010, pp. 3145-3150, s.4: it came into force w.e.f. 1 July 2010. 
7Substituted by the Punjab Finance Act 2010 (VI of 2010), published in the Punjab Gazette (Extraordinary), dated : 28 June 
2010, pp. 3145-3150, s.4: it came into force w.e.f. 1 July 2010. 
8
[7. Government to be share -holder.– Notwithstanding anything contained in 
section 6, the Government shall be the share -holder of the Bank and may hold upto 
eighty percent of the shares issued by the Bank.] 
8.  Head Office of the Bank.– The Head Office of the Bank shall be at Lahore. 
9.  Board.– The general superintendence and direction of the affairs and 
business of the Bank shall be entrusted to a Board which may exercise all powers 
and do all such ac ts and things as may be exercised or done by the Bank and are 
not by this Act expressly directed or required to be done by the Bank in general 
meeting. 
10. Constitution of the Board. – (1) The Board shall consist of the following 
Directors, namely:– 
(a) the 
9
[President] appointed by the Government under section 11; 
(b) four Directors elected in special meeting by the shareholders for a term 
of three years; and 
(c) six Directors appointed by the Government: 
Provided that a Director under clause (b), shall not  be eligible to seek 
election after a second consecutive term without a break of one term. 
10
[(2) The Chairman of the Board shall be nominated by 
11
[Government] from 
amongst official Directors. 
(3) The Chairman shall preside over the meetings of the Board an d shall 
have a casting vote, but he shall not exercise any executive authority or powers.] 
11. 
12
[President].– (1) The 
13
[President] shall be appointed by the Government for 
a period 
14
[of] five years and on such salary and terms and conditions of service as 
the 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: 
                                                           
8Substituted by the Bank of Punjab (Amendment) Act 2012 (XXXII of 2012) , published in the Punjab Gazette (Extraordina ry), 
dated: 16 March 2012, p. 40707, s. 2. It was earlier substituted by the Punjab Finance Act 2010 (VI of 2010), published in the 
Punjab Gazette (Extraordinary), dated: 28 June 2010, pp. 3145-3150, s.4: it came into force w.e.f. 1 July 2010. 
9Substituted for the words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 4. 
10Substituted by the Bank of Punjab (Amendment)  Ordinance 2002 (LVII of  2002), published in the Punjab Gazette 
(Extraordinary), dated: 26 September 2002, pp. 2817-2818, s. 2. Under Article 5A of the Provisional Constitution Order 1999 (I 
of 1999), as amended, read with Article 270AA of the Constitution of the Islamic Republic  of Pakistan, 1973, it shall not be 
subject to any limitation as to duration prescribed in the Constitution. 
11Substituted for the word “Governor” by the Bank of Punjab (First Amendment) Act 2003 (II of 2003), published in the Punjab 
Gazette (Extraordinary), dated: 8 February 2003, p. 281, s. 2. 
12Substituted for the words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 5. 
13Substituted for t he words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 5. 
14Substituted for the words “not less than three years and not exceeding” by the Bank of Punjab (Amendment) Ordinance 
2002 (LVII of 2002 ), published in the Punjab Gazette (Extraordinary), dated : 26 September 2002, pp. 2817-2818,s.3: it came 
into force w.e.f. 11 March 2000. Under Article 5A of the Provisional Constitution Order 1999 (I of 1999), as amended, read with 
Article 270AA of the Constitution of the Islamic Republic of Pakistan, 1973, it shall not be subject to any limitation as to duration 
prescribed in the Constitution. 
Provided further that the appointment may be terminated in the manner 
prescribed on the ground of physical or mental incapacity or gross misconduct. 
(2) The 
15
[President] shall on the expiry of his term of office be eligible for 
re-appointment. 
(3) The 
16
[President] 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 
Board, the affairs of the Bank. 
12. Qualifications and disqualifications of Directors. – (1) No person not 
appointed by the Government to serve as a Director shall be qualified to serve as 
Director unless he is a holder in his own right of unencumbered shares of the Bank 
to the nominal amount of 
17
[twenty-five] thousand rupees at the least. 
(2) No person shall be qualified to serve as a Director– 
(a) if he is a salaried officer of any Government w hether within or without 
Pakistan and is not authorised by the Government to serve as a 
Director; 
(b) if he has been convicted of an offence involving moral turpitude; 
(c) if he was at any time in the service of the Bank and was dismissed or 
his services had been terminated by the Bank; 
(d) if he is a Director of any commercial bank other than a bank sponsored 
or established by or under the authority of the 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, 1925 or any other law for the time being in force in 
Pakistan relating to co-operative societies; 
(e) if he is in the employment of any banking company, whether on salary 
or o n commission, and is engaged in the performance of any 
continuous service for remuneration for any such company; 
(f) if he is for the time being disqualified for membership of any body 
established by or under any law for the time being in force of which th e 
constituent members are wholly or partly chosen by means of election 
18
[;] 
19
[or] 
                                                           
15Substituted for the words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 5. 
16Substituted for the words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 5. 
17Substituted for the word “hundred” by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab 
Gazette (Extraordinary), dated: 2 April 1991, pp. 849-851, s. 4. 
18The “full-stop” was replaced by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab Gazette 
(Extraordinary), dated: 2 April 1991, pp. 849-851, s. 4. 
19Added by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991), published in the Punjab Gazette (Extraordinary), dated: 2 
April 1991, pp. 849-851, s. 4. 
20
[(g) if he has been found by a competent  court under any law to have 
acted against the interest of a person with whom he had  a fiduciary 
relationship;] 
(3) The office of a Director 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; 
21
[(d) if he is declared to be a lunatic or of unsound mind by a competent  
court;] 
(e) if he has absented himself from three consecutive meetings of the 
Board or from all such meetings for a continuous period of six months, 
whichever is longer, without leave of absence from the Board; 
(f) if he ceases to hold in his own right the amount of shares required to 
qualify him for the office; 
(g) if he incurs any of the disqualifications mentioned in sub-section (2); 
(h) if, in relation of 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 such 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 for a continuous period of six years from the 
date when he was first elected as such Director or, as the case may 
be, was appointed by name and otherwise than by designation of 
office, as such Director. 
(4) No two persons who are partners of the same mercantile firm, or who 
are Directors of the same private company, or one of whom is the general 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 Board. 
13. Removal of Directors. – (1) The shareholders ma y, 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 remove any Director, other than a Director 
appointed by the Government, 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 15. 
(2) Directors appointed by the Government may be removed and replaced 
by other Directors at the discretion of the Government. 
                                                           
20Added by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991), published in the Punjab Gazette (Extraordinary), dated: 2 
April 1991, pp. 849-851, s. 4. 
21Substituted by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab Gazette (Extraordinary), 
dated: 2 April 1991, pp. 849-851, s. 4. 
14. Terms o f office of Directors. – A Director appointed by the Government, 
other than 
22
[President], shall hold office during the pleasure of the Government. 
15. Vacancies.– (1) Any vacancy occurring on the Board by the death, 
resignation, removal or disqualification of any Director shall be filled by the remaining 
Directors, who shall co-opt a duly qualified person to fill the vacancy: 
Provided that where a vacancy occurs in the office of a Director appointed by 
the Government, the vacancy shall be filled only by appointment by the Government. 
(2) Any Director so appointed shall be deemed to have held office from the 
date on which the Director in whose place he is appointed was appointed, or, when 
such Director was co -opted or appointed under sub -section (1), from the date on 
which his immediate predecessor was appointed, as the case may be. 
(3) Any Director co-opted under sub-section (1) shall retire at the next 
general meeting, as the case may be and the vacancy so occurring on the Board 
shall be filled by election as provided under this Act. 
16. 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 at 
the head office at Lahore, at such time as may be determined by t he Board and at 
the meeting the shareholders present shall be entitled to discuss the annual account, 
the report of the Board on the working of the Bank throughout the year, and the 
auditors’ report on the annual balance sheet and accounts, made up to the 
preceding thirty-first day of December. 
(2) Special meetings shall be convened and held in such manner and at 
such time and place as may be prescribed. 
17. Votes of shareholders. – 
23
[(1) Every shareholder shall be entitled to attend 
any meeting and each sha reholder 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 
registered, shall have one vote for each share held by such shareholder: 
Provided that any shareholder shall 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.] 
(2) On a poll votes may be given either per sonally or by proxy, but the 
Government as a shareholder may appoint any person to be present at any general 
meeting and to vote on its behalf. 
18. Business which the Bank is authorised to transact. – The Bank is 
authorised to carry on and transact the seve ral kinds of business hereinafter 
specified, namely:– 
                                                           
22Substituted for the words “Managing Director” by the Bank of Punjab (Amendment) Act 2005 (XIV of 2005 , published in the 
Punjab Gazette (Extraordinary), dated: 8 November 2005, pp. 1657-1658, s. 6. 
23Substituted by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab Gazette (Extraordinary), 
dated: 2 April 1991, pp. 849-851, s. 5. 
(1) 
24
[the] advancing and lending of money, and opening of cash -credits 
upon the security of– 
(a) stocks, funds and securities in which a trustee is authorised to 
invest trust money by any law for the ti me being in force in 
Punjab and shares of the State Bank of Pakistan; 
(b) participation term certificates or other securities for money 
issued under the authority of any law for the time being in force 
in Punjab by, or on behalf of, a local Authority; 
(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 directions as may be issued by the Board, 
participation term certificates 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 State Bank of Pakistan; 
(f) goods which are hypothecated to the Bank as security for such 
advances, loans or credits; 
(g) accepted bills of exchange and promissory notes endorsed by 
the payees and joint and several promissory notes of two or 
more persons or firms unconnected with each other in general 
partnership; 
(h) immovable property or documents of title relating thereto, 
subject to such directions as may be issued by the Board; 
(i) subject to such directions as may be issued by the Board, crops: 
Provided that any advances or loans which are guaranteed by the 
Government may be made without any specific security 
25
[;]  
(2) 
26
[the] selling and realisation of proceeds of sale of any such promissory 
notes, participation term certificates, stock receipts, bonds, annuities, 
stocks, shares, securities or goods which, or the documents of title to 
which, have be en deposited with, or pledged, hypothecated, assigned 
or transferred to, the Bank as security for such advances, 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 of 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 o f 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: 
                                                           
24Misprinted in the gazette as “The”. 
25Misprinted in the gazette as “full-stop”. 
26Misprinted in the gazette as “The”. 
Provided that no such advance or loan shall be made without previous 
sanction of the Government; 
(4) the drawing, accepting, discounting, buying and selling of bills of 
exchange and other negotiable securities; 
(5) The investing of the funds of the Bank in, or the underwriting of, any 
stocks, funds, shares, securities, participation term certificates , bonds 
or 
27
[scrips] or other securities for money issued by a public limited 
company or any corporation established by or under any law for the 
time being in force or under the authority of the Government or the 
State Bank of Pakistan, converting and cove ring the same into money 
when required, and altering and transposing any such investment for or 
into any other of such investments; 
(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 charge of plate, jewels, title -deeds or other 
valuable goods on such terms as may be agreed on; 
(10) the managing, selling and realising of all propert y 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 
acquisition and holding, and generally the dealing with, any right, title 
or interest in any property movable or immovable which may be Bank’s 
security for any advance or loan or may be connected with any such 
security: 
Provided that the Bank shall not take over the management of any 
such property except in pursuance of any agreement with the debtor or 
of an order, judgement or decree of a court of competent jurisdiction; 
(11) the transaction of pecuniary agency business on commission and the 
entering into of contracts of indemnity, suretyship or guarantee with 
specific security or otherwise, and the underwriting, participating in, and 
carrying out of the issue of any stock, shares, participation term 
certificates and other securities; 
(12) the administration of estates for any purpose whether as an executor, 
trustee or otherwise and the acting as agent on com mission in the 
transaction of the following kinds of business, namely:– 
(a) the buying, selling, transferring and taking charge of any 
securities or any shares in any public company; 
28
[(b) the receiving of the proceeds whether principal interest or 
dividends of any securities or shares;] 
                                                           
27Substituted for the word “scripts”  by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab 
Gazette (Extraordinary), dated: 2 April 1991, pp. 849-851, s. 6. 
28Substituted by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab Gazette (Extraordinary), 
dated: 2 April 1991, pp. 849-851, s. 6. 
(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 borrowing 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 remitt ing money, bullion and 
securities under any agreement with the State Bank of Pakistan as its 
agent on behalf of Government undertaking and transacting 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 Government; 
(20) the granting of advances or loans to any other bank for the purpose of 
averting or facilitating its winding up; 
(21) with the previous permission in writing of the Government and 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; 
29
[(22) the advancing of money on non -interest basis and accor ding to the 
various common modes of financing;] 
(23) the undertaking of lease financing; and 
(24) 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 exchange business hereinbefore specified. 
30
[Explanation.– The expressions, “granting of advances or loans” or “advancing and 
lending of money” and their cognate expressions shall include financing on the basis 
of various approved modes of common interest ba sed financing like financing by 
lending, trade related modes of financing, and investment type modes of financing.] 
                                                           
29Substituted by the Bank of Punjab (Amendment) Act 1 991 (VIII of 1991) , published in the Punjab Gazette (Extraordinary), 
dated: 2 April 1991, pp. 849-851, s. 6. 
30Added by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991), published in the Punjab Gazette (Extraordinary), dated: 2 
April 1991, pp. 849-851, s. 6. 
19. Business which the Bank is not authorised to transact. – The Bank shall 
not transact any kind of banking business other than those specif ied in section 18, 
and in particular– 
(1) the Bank shall not make any advance or loan upon the security of its 
shares; 
(2) the Bank shall not discount or buy or advance or lend to any individual 
or partnership-firm an amount exceeding in the whole at any o ne 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 
presented 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 granting overdraft s and loans without security, to such 
extent as may be prescribed. 
31
[(4) the Bank shall not grant any advance, loan, credit, limit, guarantee or 
other facility or advantageously alter the terms and conditions of any 
such existing facility to– 
(i) a person who is elected or appointed as the Director; or 
(ii) a connected person or undertaking of the Director. 
Explanation.– In this clause: 
(a) a person or undertaking shall be deemed to be connected to a Director 
if: 
(i) the person is a spouse, lineal ascendant  or descendant of the 
Director; 
(ii) the undertaking is a company other than a listed public limited 
company, firm, association or persons or other entity, in which the 
Director or a connected person is a shareholder, member, partner 
or holder of a position in the management; or 
(iii) a listed public limited company in which the Director or the 
connected person holds more than ten percent of its equity or is 
entitled to more than ten percent of the distributable profits of the 
company or is a Director of the company or holds a position in the 
management of the company; and 
(b) nothing shall prevent the Bank from continuing or renewing any 
advance, loan, credit, limit, guarantee or other facility as may have 
already been granted before the election or appointment of a Director.] 
                                                           
31Substituted by the Bank of Punjab (Amendment) Act 2009 (XI of 2009), published in the Punjab Gazette (Extraordinary),  
dated: 17 November 2009, pp. 1609-1610, s. 2. 
20. Exceptions.– Notwithstanding anything contained in this Act, 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 secur ity, 
including immovable property, and on such terms and conditions and 
for such periods as may be prescribed; 
(2) grant advances or loans, 
32
[for] any period exceeding one year but not 
exceeding five years, to such small and medium industries as may, 
from time to time, be specified by the Board on such terms and 
conditions as may be prescribed: 
Provided that the amount of advances and loans outstanding at any 
time under this clause shall not exceed five percent of the total amount 
of bank deposits at such time; 
(3) grant or subsidise, from time to time, pensions, gratuities, bonuses or 
other funds created for the benefit of its officers and staff or their 
dependents; 
(4) contribute to the promotion of research in banking and allied subjects; 
and 
(5) donate funds for any charitable objects or to any charitable institutions 
or societies. 
21. Auditors.– (1) Not more than two auditors who shall be 
33
[Chartered] 
Accountants shall be elected and their remuneration fixed at the general meeting. 
The auditors may be sh areholders, but no Director 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 Board before the general meeting and if so appointed shall hold office 
only until the first general meeting. 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 elected 
under this section, the vacancy may be filled by the Board. 
22. Government Auditors. – Without prejudice to anything contained in the 
foregoing provisions, the Government may appoint such auditors as it thinks fit to 
examine and report upon the accounts of the Bank. 
23. 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 acco unts and it 
shall be his duty to examine the same, with the accounts and vouchers relating 
thereto. Every auditor shall have a list delivered to him of all books kept by the Bank, 
                                                           
32Substituted for the words “or” by the Bank of Punjab (Amendment) Act 1991 (VIII of  1991), published in the Punjab Gazette 
(Extraordinary), dated: 2 April 1991, pp. 849-851, s. 8. 
33Substituted for the word “Registered” by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab 
Gazette (Extraordinary), dated: 2 April 1991, pp. 849-851, s. 9. 
and shall at all reasonable times have access to the books, accounts and oth er 
documents of the Bank, and may, at the expense of the Bank if appointed by it, and 
at the expense of the Government if appointed by it, employ accountants or other 
persons to assist him in investigating such accounts, and may, in relation to such 
accounts, examine any Director, or any other officer of the Bank. 
(2) The auditors shall make a report to the shareholders or to the 
Government as the case may be, upon the annual balance sheet, and the statement 
of profit and loss accounts and in every such rep ort they shall state whether, in their 
opinion, the balance sheet and the statement of profit and loss accounts 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 explanation or information from the 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 Board at the general meeting. 
24. Liquidation of the Bank. – Nothing in the Companies Ordinance, 1984, shall 
apply to the Bank and the Bank shall not be placed in liquidation save by the order of 
the Government, and in such manner and under such terms and conditions, including 
the terms as to calls on and forfeiture of shares, as the Government may by its order 
of liquidation direct. 
25. Power of the Board to make bye-laws.– (1) The Board may 
34
[* * * * * * * * * * * * 
*] make bye -laws not inconsistent with this Act to  provide for all matters for which 
provision is necessary or convenient for the purpose of giving effect to the provisions of 
this Act. 
(2) In particular and without prejudice to the 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 or 
partnership-firm with or without security; 
(ii) the conditions subject to whi ch loan advances may be made to 
Directors, or officers or other staff of the Bank, or the relatives of such 
Directors, or officers, or other staff or to companies, firms or individuals 
with which or with whom such Directors, officers or other staff or 
relatives are connected as partners, Directors, managers, servants, 
shareholders or otherwise; 
(iii) 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; 
(iv) the granting of advances or loans to any other bank for the purpose of 
averting or facilitating its winding up; 
                                                           
34Deleted the words and commas “, with the previous approval of the Government,” by the Bank of Punjab (Amendment) 
Ordinance2002 (LVII of 2002), published in the Punjab Gazette (Extraordinary), dated : 26 September 2002, pp. 2817-2818, s. 
4. Under Article 5A of the Provisional Constitution Order 1999 (I of 1999), as amended, read with Article 270AA of the 
Constitution of the Islamic Republic of Pakistan, 1973, it shall not be subject to any limitation as to duration prescribed i n the 
Constitution. 
(v) the procedure and manner in which the capital of the Bank may be 
increased or reduced; 
(vi) the acquisition, maintenance and transfer o f the Bank’s residential and 
business premises; 
(vii) the contents, maintenance, inspection and closure of the register 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 
profit and loss shall be drawn up; 
(xi) the determination and payment of dividend and transfer of profits to 
reserves; 
35
[(xii) the preparation and transmission of returns to the Government;] 
(xiii) the evidential 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 in respect of such calls, the Bank’s lien on 
shares, the manner of its enforcement, forfeiture and the application of 
proceeds of sale; 
(xv) the manner in which and the conditions subject to which shares may be 
allotted, held, transferred and transmitted and generally all matters 
relating 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 Chairman of such meetings; 
(xvii) the holding and conduct of elections under this Act; 
(xviii) the final decisions on doubts and of disputes regarding the 
qualifications of candidates or the validity of elections; 
(xix) the manner in which meetings of the Board shall be convened and held, 
their quorum, the procedure to be followed at such meetings, votes of 
Directors, and ex-officio Members and the manner in which they may be 
exercised, and the appointment or/and election of Chairman of such 
Board; 
(xx) the effect of vacancies in the Board and of subsequent discovery of 
disqualifications of a Director; 
(xxi) the obligations and immunities of Directors; 
(xxii) the distribution of business amongst the Directors and their 
remuneration, if any; 
                                                           
35Substituted by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991) , published in the Punjab Gazette (Extraordinary), 
dated: 2 April 1991, pp. 849-851, s.10. 
(xxiii) the delegation of any powers of the Board to committees consisting of 
Directors, as the case may be, and the conduct of business in such 
committees; 
(xxiv) the establishment and discontinuance of branches and agencies in 
Punjab or elsewhere and the nature an d extent of the business any 
branch or agency may transact; 
(xxv) 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; 
(xxvi) the authority to draw, accept, endorse and execute documents on 
behalf of the bank; 
(xxvii) the provision of common and official seals of the Bank and the manner 
and effect of their use; 
(xxviii) the manner and form in whic h contracts binding on the Bank may be 
executed; 
(xxix) the conduct, institution and defence of legal proceedings and the 
manner of signing pleadings; 
(xxx) the addresses of shareholders and the issue and service of notices; 
(xxxi) the service of notice on the Bank; and 
(xxxii) generally, for the efficient conduct of the business, discharge of 
functions and management of the Bank. 
36
[26. Immunity.– No suit, prosecution or other legal proceedings shall lie against 
the Chairman, any Director or Government for anything which is in good faith done 
or is intended to be done under this Act or any bye-law framed under it.] 
                                                           
36Added by the Bank of Punjab (Amendment) Act 1991 (VIII of 1991), published in the Punjab Gazette (Extraordinary), dated: 2 
April 1991, pp. 849-851, s.11.