Section 17: Business which the Bank may transact

17. Business which the Bank may transact. The Bank is authorised to carry on and transact the several kinds of business hereinafter specified, namely: (1) The accepting of money on deposit 5* * from, and the collection of money for the 2[Federal Government], the Provincial Governments 6* * * Local Authorities, banks and other persons 7[:] 7[Provided that no interest shall be paid on deposits received from the 2[Federal Government], a Provincial Government 6* * * or a Local Authority;] 8[(1A) provide the refinance facility exclusively to the financial institutions falling under the supervisory jurisdiction of the Bank backed by such collateral and on such terms and conditions as may be determined by the Bank. This refinance shall not be provided to any person other than a financial institution. The Bank shall implement the refinance facility exclusively in pursuit of its mandate, without compromising its primary objective of price stability. The Bank shall not use the refinancing facility to directly or indirectly provide privileged access to funding to any financial institution or risk insurance of any specific sector.] (2) * * * * * *] (a) 9[* (b) 9[* * * * * * *] (c) The purchase, sale and rediscount of bills of exchange and promissory notes drawn on and payable in Pakistan and bearing the signature of a scheduled bank, and issued or drawn for the purpose of holding or trading in securities of the 1[Federal Government or a Provincial Government] and maturing within ninety days from the date of such purchase or rediscount, exclusive of days of grace ; (d) 2[* * * * * * *] (e) 2[* * * * * * *] (3) (a) The purchase and sale of approved foreign exchange ; (b) The purchase, sale and rediscount of bills of exchange including treasury bills, drawn in or on any place in countries whose currency has been declared as approved foreign exchange and maturing within 3[one hundred and eighty days] from the date of purchase, provided that no such purchase, sale or rediscount shall be made in Pakistan except with a scheduled bank ; (c) The keeping of balances with banks in countries whose currency has been declared as approved foreign exchange ; (4) The making to 4[5[**] scheduled banks or co-operative banks] of advances and loans repayable on demand or on the expiry of fixed periods not exceeding 6[one hundred and eighty days] against the security of— (a) stocks, funds and securities, other than immovable property, in which trustee is authorised to invest trust money by any law for the time being in force in Pakistan ; (b) gold or silver or documents of title to the same ; (c) such bills of exchange and promissory notes as are eligible for purchase or rediscount by the Bank 6[or otherwise fulfil the requirements of clause (2) but are payable on demand]; and 7[(d) promissory notes of any scheduled bank supported by such modaraba certificates or participation term certificates as are acceptable to the bank or by documents of title relating to goods, such documents having been transferred, assigned or pledged to any such bank as security for a loan or advance granted for bona fide commercial or trade transactions or for the purpose of financing seasonal agricultural operations or the marketing of crops ;] 1[(4A) * * ** * * *] 1[(4B) * * * * * * *] 1[(4C) * * * * * * *] 1[(4D) any balances held by the Bank under omitted sections 17A, 17B, 17C, 17D and 17E shall stand transferred to the paid-up capital and general reserves of the Bank;] 1[(5) * * * * * * *] 1[(6) * * * * * * *] 1[(6A) * * ** * * *] 1[(6B) * * * * * * *] (7) The issue and purchase of telegraphic transfers, demand drafts and other kinds of remittances made payable at its own branches, offices or agencies ; (8) The drawing, accepting, making and issue, on its own account or on account of the 2[Federal Government] as the case may be, of any bill of exchange, 1[*], promissory note or engagement for the payment within or without Pakistan, of Pakistan or foreign currency payable to bearer or to a banker on demand; 1[* * * * * * *] ; (9) (a) Subject to 3[sub-clause] (b) the purchase and sale of securities of countries whose currency has been declared as approved foreign exchange with an unexpired currency of not more than ten years ; (b) The restrictions relating to maturity shall not apply to securities held by the bank on the date on which this Act comes into force or any securities that may be received as assets under the Pakistan (Monetary System and Reserve Bank) Order, 1947 ; (10) (a) The purchase and sale of securities of the 4[Federal Government or a Provincial Government] of any maturity or of such securities of a Local Authority as may be specified in this behalf by the 2[Federal Government] by notification in the official Gazette on the recommendation of the 5[Board] ; (b) Securities, debentures and shares fully guaranteed as to principal and interest by the 2[Federal Government] shall be deemed for the purpose of this section to be securities of that Government ; 1[(c) The amount of such securities held at any time in the Banking Department shall be so regulated that the total value of such securities shall not exceed the aggregate amount of the share capital of the Bank, the Reserve Fund and four fifths of the liabilities of the Banking Department in respect of deposits 2[:]] 2[Provided that the Bank may only undertake the above operations or purchase such securities on the secondary markets.] 3[(11) The custody of monies, securities and other articles of value and the collection if the proceeds, whether principal or interest, profit, dividend or other return of any such securities ;] (12) The sale and realisation 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 ; (13) The acting as agent to the 4[Federal Government]; any Provincial Government, 5* * * or any Local Authority in the transaction of any of the following kinds of business, namely : (a) the purchase and sale of gold or silver or approved foreign exchange; (b) the purchase, sale, transfer and custody of bills of exchange, securities or shares in any company ; 3[(c) the collection of the proceeds, whether principal or interest, profit, dividend or other return, of any securities ;] (d) the remittance of such proceeds at the risk of the principal, by bills of exchange payable either in Pakistan or elsewhere ; 6* (e) the management of public debt; 6[and] 6[(f) the transacting of special drawing rights with the International Monetary Fund;] (14) The purchase and sale of gold coin and gold or silver bullion ; (15) The opening of an account with or the making of any agency arrangement with, and the acting as agent or correspondent of a bank incorporated in any country outside Pakistan or the principal currency authority of any country under the law for the time being in force in that country or any 7[international or regional bank formed by such principal currency authorities, 6* the investing of the funds of the Bank in the shares and securities of any such international or regional bank 6[and the holding and transacting of special drawing rights with the International Monetary Fund]]; (16) Subject to 8[sub-clauses] (b) and (c) the borrowing of money 9* * * for the (a) purpose of the business of the Bank, and the giving of security for money so borrowed; (b) No money shall be borrowed under this sub-section from any person in Pakistan other than a scheduled bank or from any person outside Pakistan other than a bank which is the principal currency authority of any country under the law for the time being in force in that country ; (c) The total amount of borrowings from persons in Pakistan shall not at any time exceed the amount of the share capital of the Bank ; (17) The making and issue of bank notes subject to the provisions of this Act ; 1[(18) The exercise of powers and the performance of functions and duties entrusted to the Bank by or under this Act or any other law for the time being inforce;] 2[(18A) The entering into clearing and payments arrangements with any country or group of countries, on a general or regional or sub-regional basis, participation in the formation and settlement of international payments transactions under such arrangements, and incurring financial and other obligations relating thereto;] 3[(19) * * * * * * *] 3[(19A) * * * * * * *] (20) Generally, the doing of all such matters and things as may be necessary, incidental to or consequential upon the exercise of its powers or the discharge of its duties or functions under this Act.

Effective date: 1956-04-18

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