Section 20: Prohibition of common directors

20. Prohibition of common directors.--(1) Except with the permission of the State Bank, no banking company incorporated in Pakistan shall have as a director any person who is a director-- (i) of any other banking company; or (ii) of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company. 1[(IA) No banking company incorporated in Pakistan shall have as a director any person who is-- 2[(a) a Federal Minister, a Minister of State or a Provincial Minister; or] (b) a person in the service of Pakistan who is not appointed or nominated by Government as a director by virtue of his office.] (2) If immediately before the commencement of this Ordinance any person holding office as a director of a banking company is also a director of companies which among themselves are entitled to exercise voting rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company he shall, within such period from such commencement as the State Bank may specify in this behalf-- (a) either resign his office as a director of the banking company; or (b) choose such number of companies as among themselves are not entitled to exercise voting rights in excess of twenty per cent of the total voting rights of all the shareholders of the banking company as companies in which he wishes to continue to hold the office of a director and resign his office as a director in the other companies.

Effective date: 1962-06-07

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