Section 5: Definitions

Plain-Language Summary

A general explanation to aid understanding. The official statutory text appears below.

This section defines the following terms used in The Banking Companies Ordinance, 1962: • approved securities — the securities in which a trustee may invest money under the applicable trust laws, and for the purpose of__ (i) sub-section (2) of section 13, includes such other securities as the Federal Government may, by notification in the official Gazette, declare to be approved securities for the purpose of that sub- section; and (ii) sub-section (1) of section 29, includes__ (a) such types of Pakistan rupee obligations of the State Bank as it may specify from time to time; and (b) such types of Pakistan rupee obligations of the Federal Government or a Provincial Government or of a corporation wholly owned or controlled, directly or indirectly, by the Federal Government or a Provincial Government and guaranteed by the Federal Government as the Federal Government may, by notification in the official Gazette, declare to the extent determined from time to time to be approved securities for the purpose of that sub- section;] • banking — the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise • banking company — any company which transacts the business of banking in Pakistan 1[and includes their branches and subsidiaries functioning outside Pakistan of banking companies incorporated in Pakistan]; Explanation.-- Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause 2[ • banking company under Resolution — a banking company in respect of which the State Bank has made an order under section 42D and until such time that the State Bank by an order declares that the banking company concerned is no longer under Resolution or until a winding-up order is made under this Ordinance;] • bridge bank — an entity established under section 42H to temporarily take over and maintain some or all of the assets and liabilities of a banking company as part of the Resolution process;] 3[ • company — any company which may be wound up under the 1[Companies Ordinance, 1984 (XLVII of 1984)] 1[and includes a branch of a foreign banking company doing banking business in Pakistan under a licence issued by the State Bank in this behalf;] 2[ • demand liabilities — liabilities which must be met on demand, and "time liabilities" means liabilities which are not demand liabilities; 3[ • Executive Committee — an Executive Committee established under section 9F of of the State Bank of Pakistan Act, 1956 (XXXIII of 1956);] 4[ • foreign banking company — a banking company, not incorporated in Pakistan, which has a branch or branches doing banking business in Pakistan under a licence issued by State Bank in this behalf;] • Minister-in-charge — the Federal Minister, to whom business of this Act stands allocated;] • prescribed — prescribed by rules made under this Ordinance • secured loan or advance — a loan or advance made on the security of assets the market value of which is not at any time less than the amount of such loan or advance, and "unsecured loan or advance" means a loan or advance not so secured, or that part of it which is not so secured; 3[ • sponsor shares — five percent or more paid-up shares of a banking company, held or beneficially owned by a person individually or in concert with his family members, group companies, subsidiaries and associates;] • State Bank — the State Bank of Pakistan 4[;] 5[ • undertaking — any concern, institution, establishment or enterprise engaged in the production, supply or distribution of goods, or in the provision or control of any services relating to the provision of board, lodging, transport, entertainment or amusement, or of facilities in connection with the supply of electrical or other energy, or to the purveying of news, insurance or investment.] This is the official statutory text, shown as written — it is not a paraphrase or a legal opinion. Consult a verified lawyer to see how it applies to your specific situation.

5. Definitions.-- In this Ordinance, unless there is anything repugnant in the subject or context,-- 1[(a) "approved securities" means the securities in which a trustee may invest money under the applicable trust laws, and for the purpose of__ (i) sub-section (2) of section 13, includes such other securities as the Federal Government may, by notification in the official Gazette, declare to be approved securities for the purpose of that sub- section; and (ii) sub-section (1) of section 29, includes__ (a) such types of Pakistan rupee obligations of the State Bank as it may specify from time to time; and (b) such types of Pakistan rupee obligations of the Federal Government or a Provincial Government or of a corporation wholly owned or controlled, directly or indirectly, by the Federal Government or a Provincial Government and guaranteed by the Federal Government as the Federal Government may, by notification in the official Gazette, declare to the extent determined from time to time to be approved securities for the purpose of that sub- section;] (b) "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise; (c) "banking company" means any company which transacts the business of banking in Pakistan 1[and includes their branches and subsidiaries functioning outside Pakistan of banking companies incorporated in Pakistan]; Explanation.-- Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause 2[(ca) "banking company under Resolution" means a banking company in respect of which the State Bank has made an order under section 42D and until such time that the State Bank by an order declares that the banking company concerned is no longer under Resolution or until a winding-up order is made under this Ordinance;] (d) "branch" or "branch office", in relation to a banking company, means any branch or branch office, whether called a pay office or sub-pay office or by any other name, at which deposits are received, cheques cashed or moneys lent, and for the purposes of section 40 includes any place of business where any other form of business referred to in sub-section (1) of section 7 is transacted; 2[(da) "bridge bank" means an entity established under section 42H to temporarily take over and maintain some or all of the assets and liabilities of a banking company as part of the Resolution process;] 3[(dd) "creditor" includes persons from whom deposits have been received on the basis of participation in profit and loss and a banking company or financial institution from which financial accommodation or facility has been received on the basis of participation in profit and loss, mark-up in price, hire-purchase, lease, or otherwise;] (e) "company" means any company which may be wound up under the 1[Companies Ordinance, 1984 (XLVII of 1984)] 1[and includes a branch of a foreign banking company doing banking business in Pakistan under a licence issued by the State Bank in this behalf;] 2[(ee) "debtor" includes a person to whom, or a banking company or financial institution to which, finance as defined in the Banking Tribunals Ordinance 1984, has been provided;] (f) "demand liabilities" means liabilities which must be met on demand, and "time liabilities" means liabilities which are not demand liabilities; 3[(fa) "Executive Committee" means an Executive Committee established under section 9F of of the State Bank of Pakistan Act, 1956 (XXXIII of 1956);] 4[(ff) "family members" in relation to a person means his spouse, dependent lineal ascendants and descendants and dependent brothers and sisters;] 5[(ffa) "foreign banking company" means a banking company, not incorporated in Pakistan, which has a branch or branches doing banking business in Pakistan under a licence issued by State Bank in this behalf;] (g) "gold" includes gold in the form of coin, whether legal tender or not, or in the form of bullion or ingot, whether refined or not; 2[(gg) "loans, advances, and credit" includes "finance" as defined in the Banking Tribunals Ordinance, 1984;] (h) "managing director", in relation to a banking company, means a director who, by virtue of an agreement with the banking company or of a resolution passed by the banking company in general meeting or by its Board of Directors or, by virtue of its memorandum or articles of association, is entrusted with the management of the whole, or substantially the whole of the affairs of the company, and includes a director occupying the position of a managing director, by whatever name called; 3[(ha) "Minister-in-charge" means the Federal Minister, to whom business of this Act stands allocated;] (i) "prescribed" means prescribed by rules made under this Ordinance; (j) "private company" has the same meaning as in the 1[Companies Ordinance, 1984 (XLVII of 1984)]; (k) "registrar" has the same meaning as in the 1[Companies Ordinance, 1984 (XLVII of 1984)]; 2[(ka) "Resolution" refers to the process of exercising one or more of the Resolution powers as provided in section 42E with a view to achieve the Resolution objectives including by ensuring the continuity of a banking company's critical functions, as specified by the State Bank;] (l) "scheduled bank" has the same meaning as in the State Bank of Pakistan Act, 1956 (XXXIII of 1956); (m) "secured loan or advance" means a loan or advance made on the security of assets the market value of which is not at any time less than the amount of such loan or advance, and "unsecured loan or advance" means a loan or advance not so secured, or that part of it which is not so secured; 3[(mm) "securities" includes securities as defined in the Capital Issues Continuance of Control) Act, 1947 (XXIX of 1947);] 2[(mma) "sponsor shares" means five percent or more paid-up shares of a banking company, held or beneficially owned by a person individually or in concert with his family members, group companies, subsidiaries and associates;] (n) "State Bank" means the State Bank of Pakistan 4[;] 5[(o) "substantial interest" in an undertaking shall be deemed to be possessed by a person if he or any of his family members is the owner, director or officer of or has control over the undertaking or if he or any of his family members holds shares carrying not less than twenty per cent of the voting power in such undertaking; Explanation.-- For the purpose of this clause,-- (i) "control" , in relation to an undertaking, means the power to exercise a controlling influence over the management or the policies of the undertaking, and, in relation to shares, means the power to exercise a controlling influence over the voting power attached to such shares; (ii) "person" includes a Hindu undivided family, a firm, an association or body of individuals, whether incorporated or not, a company and every other juridical person; and (iii) "undertaking" means any concern, institution, establishment or enterprise engaged in the production, supply or distribution of goods, or in the provision or control of any services relating to the provision of board, lodging, transport, entertainment or amusement, or of facilities in connection with the supply of electrical or other energy, or to the purveying of news, insurance or investment.].

Effective date: 1962-06-07

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