Section 83: Penalties

83. Penalties.-- (1) Whoever in any return balance-sheet or other document or in any information required or furnished by or under or for the purposes of any provision of this Ordinance, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to 1[penalty of an amount as specified in the Fourth Schedule.] 2[(1A) If any person, being the chairman, director, chief executive, by whatever name called, or official liquidator or an officer of a banking company, mismanages the affairs of the banking company or misuses his position for gaining direct or indirect benefit for himself or any of his family members, he shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to 1[penalty of an amount as specified in the Fourth Schedule], and shall be ordered by the court trying the offence, to deliver up or refund within a time to be fixed by the court any property acquired or gained by him in his own name or in name of his family members by so mismanaging the affairs of the banking company or misusing his position or, in default, to suffer imprisonment for a term which may extend to three years.] 3[(1AA) Any executive officer, director or chief executive of a banking company which is either directly or indirectly owned, controlled or managed by the Federal Government or a Provincial Government who extends, or aids in extending, a loan, advance, or any financial facility to a borrower or customer on the verbal instructions of a holder of a public office without reducing the terms of the instructions into writing and drawing them to the attention of his superior officer, or the board of directors, shall be guilty of an offence punishable with imprisonment of either description which may extend to one year, or with fine 4[not exceeding the amount of loan, advance or financing facility so extended], or with both, in addition to such other action which may be taken against him in accordance with law; and] 5[(1B) If any company which is not a banking company, or a banking company which does not hold a licence under section 27 or the licence granted to which has been cancelled, or any individual or association or body of individuals, transacts the business of banking in Pakistan, the chief executive, by whatever name called, of the company and every director, manager, and other officer of the company, and the individual and every member of the association or body of individuals, shall be deemed to be guilty of such contravention and shall be punishable with imprisonment of either description for a term which may extend to seven years and with fine the amount of which shall not be less than twice the amount of deposits received by the company or, as the case may be, the individual or the association or body of individuals in transacting the business of banking, and shall be ordered by the Court trying the offence to pay the fine within a time to be fixed by the Court or in default to suffer further imprisonment for a term which may extend to five years.] 6[(1C) Whoever contravenes, or attempts to contravene, or abets the contravention of, the provisions of section 7[27A or section 43A] 7[or obstructs or hinders any person in the exercise of his powers or discharge of his functions under section 43AA] or section 43C or sub-section (1) or sub- section (3) or sub-section (4) of section 43D or section 43E shall be punishable with imprisonment of either description for a term which may extend to five years and with 1[penalty of an amount as specified in the Fourth Schedule].)] 7[(1D) If any company, firm or person contravenes the provisions of section 27A, the chief executive of the company and its directors, every partner of the firm and such person shall be guilty of an offence punishable with imprisonment of either description for a term which may extend to ten years and with fine the amount of which shall not be less than twice the amount of deposits received in contravention of the said section and forfeiture of whole or part of the property of such company, firm or person and the chief executive of the company and its directors, every partner of the firm and person.] (2) If advances are made by a banking company in contravention of the provisions of sub-section (1) and (2) of section 24, every director or other officer of the banking company who is knowingly a party to the contravention shall be punishable with imprisonment which may extend to three years and with a 1[penalty] 2[which may extend to the amount of loan so extended and with a further 1[penalty of an amount as specified in the Fourth Schedule.] (3) If any person fails to produce any book, account or other document or to furnish any statement or information which under sub-section (4) of section 40 it is his duty to produce or furnish, or to answer any question relating to the business of a banking company which he is asked by an officer making an inspection under that section, he shall be punishable with a 1[penalty of an amount as specified in the Fourth Schedule]. (4) If any deposits are received by a banking company in contravention of an order under 1[sub- section (5) of section 26A], every director or other officer of the banking company unless he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent it, shall be deemed to be guilty of such contravention and shall be punishable with a fine which may extend to twice the amount of the deposits so received. 1[(5) if any other provision of this Ordinance is contravened or circumvented, or if any default is made in complying with any requirement of this Ordinance or of any order, rule, regulation, instruction, circular, notification, guideline or direction made or condition imposed thereunder, every person who is knowingly a party to the contravention or default or circumvention shall be punishable with penalty of an amount as specified in the Fourth Schedule.] 1[(5A) where any person recklessly or deliberately engages in any un-safe or un-sound practice, circumvention of supervisory instructions or deliberate breach of fiduciary duty causing knowingly a substantial loss to a banking company or a substantial pecuniary gain or other benefit to himself or to any other person, by reason of regulatory violation or circumvention, deviation from or breach of established banking practices, such person shall be liable to penalty of an amount as specified in the Fourth Schedule. (5B) Any person aggrieved by imposition of a penalty under sub-sections (3), (4), (5) and (5A) may, within thirty days from the date of intimation of the penalty, prefer an appeal to such officer of the State Bank superior in rank to the officer by whom the decision appealed against was given as may be authorized in this behalf by the Governor State Bank and any order passed by such authorised officer after providing an opportunity of being heard shall be final. Explanation.__ For the purpose of this section, the term `knowingly' shall have the same meaning as given under section 41D.] 3[(6) Without prejudice to the provisions of sub-section (5), a banking company which makes default in complying with the requirements of sub-section (1) of section 29 shall, in respect of every day of default, pay to the State Bank on demand a penalty 1[as determined by the State Bank from time to time in accordance with clause (a) and (b) below],-- (a) if no amount is maintained, of the minimum amount required to be maintained under that sub-section, and (b) if any amount below such minimum is maintained, of the amount by which the amount maintained falls short of the required minimum1[.] 1[* * * * * * *] 2[(7) Without prejudice to the provisions of sub-section (5), if a banking company fails or refuses to pay or make whole or part of the amount of deposit or special deposits or penalty referred to respectively in 3[* * *] section 13, sub-section (4) of section 25 and sub-section (6), the State Bank may, without notice to the banking company, debit the amount of default to any account of the defaulting banking company held with the State Bank.] 4[(8) Without prejudice to the provisions of sub-section (5) the pecuniary fines prescribed under this Ordinance shall be imposed and recovered by State Bank: Provided that if a banking company fails or refuses to pay the fines or penalties imposed by State Bank under this Ordinance, the State Bank may, without notice to the banking company, debit the amount of default to any account of the banking company held with the State Bank.] 1[(9) The Central Board of Directors of the State Bank may, alter or add to, the Fourth Schedule.]

Effective date: 1962-06-07

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