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Laws relating to Banking

The Contract Act, 1872

The Stamp Act 1899
The Registration Act, 1908
The Insolvency Act, 1997
The Limitation Act, 1908
Land Laws and Documents
Money Laundering Prevention Act, 2012
The Anti-Terrorism (Amendment) Act, 2013

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 Important provisions of the Contract Act, 1872

Contract Defined

A Contract is an agreement enforceable by law (Sec - 2). To be enforceable by Law, a contract must be
an agreement, the objective is to create legal obligation.

Essentials of a valid Contract (Sec 10)

Proposal or offer by one Party : and acceptance of that proposal or offer by another Party.
An intention to create legal relationship.
Free consent between or among the parties.
Lawful consideration.
Capacity of the parties to enter into the contract.
Objective of the contract must be legal and not opposed to public policy.
There must be at least two parties to make the contract.
The agreement is possible of being performed.
The agreements, the meaning of which is not certain or capable of being made certain.
Not expressly declared void.

Offer:

Offer must be Expressed / implied depending upon circumstances

Offer must be made to definite person, class of persons.
Terms of offer must be certain.
A mere intention or invitation is not an offer.
Offer may be general or specific.
Offer must be communicated to the offeree.
Offer may be conditional.

Acceptance:
Acceptance must be Expressed / implied.
Acceptance must be unqualified or definite.
Acceptance must be expressed in some usual or reasonable manner.
Acceptance must be communicated to the offeror.
Acceptance may be conditional
Acceptance must be made while the offer is in force.

Kinds of Contracts:

Valid Contract: A contract is valid when it is enforceable by Law.

Void Contract: A contract is void when it has no legal effect.
Voidable Contract: A Voidable contract is a one which can be voided at the option of one of the
Parties to the Contract.

Formal Contract: Known as a deed contract under seal and signature on required stamp value.
Informal Contract: Merely written in plain paper or verbal.
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Executed Contract: A contract creates mutual rights and obligations. if obligations are performed
by6 both the parties, it is called Executed contract.
Executory Contract: In a contract where neither the parties performed, the contract is called is called
Executory contract.

Consideration:

Consideration has been defined as the Price paid by one party for the Promise of the other. It is so
important that “There is no consideration, there is no contract.”

Consideration must be real.

Consideration must not be illegal.
Consideration need not be adequate.
In Consideration desire or request of the promisor is essential.
Consideration may move from the promise or others.

148. "Bailment", "bailor", and "bailee" defined

A "bailment" is the delivery of goods by one person to another for some purpose, upon a contract that
they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the
directions of the person delivering them. The person delivering the goods is called the "bailor". The
person to whom they are delivered is called the "bailee".

Explanation – If a person already in possession of the goods of another contracts to hold them as a
bailee, he thereby becomes the bailee, and the owner becomes the bailor, of such goods although they
may not have been delivered by way of bailment.

170. Bailee's particular lien

Where the bailee has, in accordance with the purpose of the bailment, rendered any service involving
the exercise of labour or skill in respect of the goods bailed, he has, in the absence of a contract to the
contrary, a right to retain such goods until he receives due remuneration for the services he has
rendered in respect of them.

Illustrations

(a) A delivers a rough diamond to B, A jeweller, to be cut and polished, which is accordingly done. B is
entitled to retain the stone till he is paid for the services he has rendered.

(b) A gives cloth to B, a tailor, to make into a coat. B promises A to deliver the coat as soon as it is
finished, and to give a three months' credit for the price. B is not entitled to retain the coat until he is
paid.

171. General lien of bankers, factors, wharfingers, attorneys and policy- brokers

Bankers, factors, wharfingers, [ advocate of the Supreme Court] and policy-brokers may, in the
absence of a contract to the contrary, retain, as a security for a general balance of account, any goods
bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed
to them, unless there is an express contract to that effect.

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172. "Pledge", "Pawnor" and "Pawnee" defined

The bailment of goods as security for payment of a debt or performance of a promise is called "pledge".
The bailor is in this case called the "pawnor". The bailee is called the "pawnee".

173. Pawnee's right of retainer

The pawnee may retain the goods pledged, not only for payment of the debt or the performance of the
promise, but for the interest of the debt, and all necessary expenses incurred by him in respect of the
possession or for the preservation of the goods pledged.

Lien:
According to Contract Act 1872 Sec: 170, a lien is the right of a creditor in possession of goods,
securities or any other assets belonging to the debtor to retain them until the debt is repaid. Lien given
a person only a right to retain the possession of the goods and not the power to sell unless such right is
expressly conferred by statute (e.g. to unpaid seller or Pawnee) or by custom or usage.
Lien is the right to hold property until the claim on that property is paid. More explicitly; lien is the
right of a creditor to retain goods / securities belonging to the debtor, until the debt due from the later is
paid.
Bankers are entitled to General lien but it also goes a step further to realize the security. Banker's lien is
equal to implied pledge and can sell the security after reasonable notice to the debtor provided the
property comes into the hands of the Banker in the ordinary course of business. The right of lien to the
Banker is conferred by the Contract Act, as such, no separate agreement or contract is necessary.
However, to be on the safe side, the Bankers take a letter of lien from the Customer mentioning that the
goods are entrusted to the Banker as a security for loan- existing or future-taken from the Banker and
that the latter can exercise the right of lien. The right of lien also can he exercised on goods or other
securities standing in the name of the borrower only and not jointly with others e.g. in case the goods
/ security and held in joint names of two or more persons, the Banker can not exercise his right of
general lien in respect of a debt due from a single person.

However, the Banker's right of lien is not applicable to the following properties of the Customers, viz.
safe custody deposits i.e. jewelry of documents for safe custody, bills of exchange or other
documents entrusted for special purpose money deposited for special purpose, documents or
valuables left in the hands of Banker's hand inadvertently, amounts not due, trust accounts etc.

Particular Lien
1. It is attached to some specific goods.
2. It is a right to retain possession over those particular goods in connection with which the debt arose.
3. It is restricted to those goods which are the subject matter of the contract and are Liable for certain
demands of person in possession of these goods.

According to section 170 of the Contract Act, a bailee can exercise particular lien over the goods bailed,
provided:
i) There is no contract to the contrary,
ii) Bailee has rendered some services some service involving labour as skill to the goods bailed
iii) The service is not contrary to the purpose of bailment.

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General Lien
A general Lien entitles a person to retain possession of goods belonging to another for general balance
of account.
It will entitle a person the possession of the goods to retain them until all claims or accounts of the
person in possession against the owner of the goods are satisfied.
A banker is entitled to a general Lien.
A banker, therefore, can retain all securities etc, in his possession fill all this claims against the
concerned person are satisfied.

Negative Lien
In case of negative lien the bank neither has nor obtains possession of any of the assets of the
borrower. It is simply takes a declaration from the borrower that:
i) The assets mentioned there in are free from any sort of charge or encumbrance.
ii) The borrower shall not dispose them of or create any sort of charge against them without the
permission of the bank

The banker cannot directly realize his debts from such assets. However, on account of the above
restriction the interests of the banker are to a certain extent protected.

Bank may extends loan facility to its customers against the lien of

a. Fixed Deposit Receipt

b. Share Certificate
c. Credit balance of Deposit Scheme. And others A/C's ( lien- cum- set off )

The following essential conditions for exercising the right of lien must be fulfilled:

a. The goods or securities over which the right of lien shall be exercised must be in the possession of
Bank.
b. There must be a lawful advance due to the Bank.
c. There shall be no contract contrary to lien.
d. Goods or securities over which right of lien shall be exercised must be suitably discharged in favour
of Bank.

Banker does not have lien over the following items:

a. Credit balance of deposit account of the borrower

b. Securities received by Bank for sale
c. Goods or securities left by the customer in the Banker's hand inadvertently
d. Money deposited for a special purpose
e. Instruments deposited for collection
f. Articles deposited for safe custody etc.

Contract of Agency

Definition of Agent & Principal (Section - 182): “An „Agent‟ is a person employed to do any act for
another or to represent another in his dealings with third persons. The person for whom such act is
done or who is so represented is called the principal”.

Different Classes of Agent:

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 - Broker: Brings buyers and sellers into contract
- Factor: Good kept with him for sale
- Auctioneer: Who cab sell goods f principal on auction.
- A commission : like broker- gets also commission agent.
- A delcredere Agent: Guarantees other parties for performance
- General Agent and particular: Represents in all matters. Second one in only that aspect

Methods of Creating Agency:

- Agency by express
- Agency by Implied Agreement (Agency of necessity)
- Agency by Stopped or by Holding out (If statements make other believe that particular
one is agent.)
- Agency of Necessity (on emergency basis if any agent works)
- Agency by ratification (subsequent acceptance)

Indemnity & Guarantee

Contract of Indemnity (Section - 124): “A contract by which one party promises to save the other
from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person,
is called a contract of Indemnity”.

Contract of Guarantee (Section - 126): “Contract of Guarantee‟ is a contract to perform the promise,
or discharge the liability, of a third person in case of his default” ‟Contract of Guarantee‟ is also called
a „contract of of Surety ship‟. The person who gives the guarantee is called the „Surety‟ the person in
respect whose default the Guarantee is given is called the “Principal debtor” and the person to whom
the guarantee is given called the „Creditor‟

Bank Guarantee:
Guarantee
Guarantee is a commitment of the Guarantor to pay a certain sum of money to the beneficiary of the
Guarantee in Consideration, when the party named in the Guarantee on whose behalf the Guarantee is
issued fails to perform as per contract or fails to discharge his obligations.

When the Bank issues guarantee on behalf of its customer the Bank becomes Guarantor. A Guarantee
of the Bank is a separate legal obligation whereby the issuer commits to pay a fixed sum of money to
the beneficiary without further examination of the breach of terms of contract.

Although the Guarantee is a non-funded portfolio of the Bank and the Bank is not in a position to pay
the amount of Guarantee; sometimes the Bank may require to pay the money where the customer fails
to act as per contract. Guarantee is the contingent liability of the Bank.

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Types of Guarantee
Bid Bond Guarantee

Bid Bond is issued at the initial stage of a contract. The purpose of which is to ensure that the party to
whom a contract is ultimately awarded will indeed accept the award and proceed with the execution of
either construction or supply or delivery obligation falling under the contract. The bond may be
requested for either for a tender or private negotiated contract.

Care should, therefore, be taken while committing for Bid Bonds since by inference, the Bid Bond
Issuing Bank may be committing itself for greater exposure than the Bid Bond only. Bid Bonds are
usually for 2% to 5% of a contract value.

Performance Guarantee (PG):

Performance Guarantee is issued in contracts to ensure completion of contract of work or supplies.

Performance Bonds offer the following benefits to the Employer:

a) an assurance of credit worthiness of the contractor or supplier as the case may be,
b) an eventual access to additional resources should the contractor or exporter fail to perform or
deliver; hence minimize the potential financial damage to the Employer.
c) a tool acting as a leverage on the contractor / supplier for due and diligent execution of the job.

Performance Guarantee is generally issued for 5% to 10% of the contract value. Performance
Guarantee will remain valid until the end of the expected contract period. Quite frequently extension of
the expiry is requested / demanded by the Beneficiary. In most cases major construction contracts or
turn-key projects, the Performance Guarantee is replaced by Maintenance Guarantee. In some
instances, the Performance Guarantee itself will include a Maintenance clause which will render the
need for a separate maintenance Guarantee redundant.

Advance Payment Guarantee (APG)

APGs are issued in most major contracts to cover the advance payment of certain sum of money,
under the contract, by the employer, to the contractor or the supplier to permit the later contractor
(supplier) cover mobilization costs necessary to proceed with the execution of the contract. Once again,
like the Performance Bond, it should be ensured that the instrument obligates the bank to a simple
commitment to pay the guaranteed amount or the unadjusted part thereof, without any dispute
regarding improper use of the advanced funds.

Generally Advance Payment Guarantees are for 20% to 30% of contract value, and by convention, the
guarantee reduces proportionately to this fraction extent of each Progress Payment Certificate (PPC).
This means that as more progress payment certificates are produced, more evidence is given of the
proper use of the advance payment . Therefore, by common practice most Advance Payment
Guarantees incorporates a standard clause whereby the claim value under the guarantee reduces by
the agreed adjustment rate from each progress payment. In this manner, the outstanding may reduce
to zero prior to final completion of the contract.
A second important feature to ensure in each APG is that by its very text, the guarantee should become
operative upon its full face value of good (realized) funds, on account of the a/c party.

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Margins for APG may vary from one credit to another; however, it is customary to obtain minimum 25%
and maximum 50% margin against advance payment guarantees. The margin should normally be
higher in cases where the Bank is also concurrently providing working capital finance.

Retention Bond (RB)

Under most construction contracts, by agreement a part of the progress payments ( running bills) is
retained by the employer in order to cover future unforeseeable expenses arising from heretofore
untraceable faults in the work performed. The fraction of the progress payments thus retained by the
employer which accumulate over the life of the contract is usually released to the contractor but
generally against a guarantee from a bank. This guarantee is commonly known as Retention Bond. The
important features of Retention Bond are that (i) the guarantor‟s total liability at any point of time is
limited to the extent of progress payment portions thus released to the contractor and (ii) the value of
the guarantee continues to increase as the contract progress. Therefore, RB is in exact opposite to the
APG.

Guarantee in Lieu of Security Deposit

Guarantee in Lieu of Security Deposit may be issued in case of:

1 Guarantee to the Government for payment of Custom duties, taxes, VAT etc.
2 Guarantee to the Gas, Electricity, WASA, T&T for installation of connection.
3 Guarantee to a professional body for membership, namely International Civil Aviation
Organisation (ICAO).

Payment of Dues Guarantee:

Guarantee to the landlord for payment of rent

Guarantee to the Department of Customs and Excise for payment of duties.
Guarantee to a Supplier of Goods for payment in respect of supplies made.

Shipping Guarantee

Shipping guarantees are issued by the bank when the consignee (importer) of a cargo, imported under
a letter of credit issued by the bank, wants the steamship company or its legally appointed agent, to
deliver the cargo without the production of the Bill of Lading (i.e. title documents).

The shipping guarantee is thus in reality an indemnity whereby the bank promises to compensate
beneficiary any loss caused by the bank‟s failure to produce the original title documents subsequently
received by the bank.

It is advisable to issue shipping guarantees by obtaining full cash cover for the L/C liability and the
same shall be issued on written request of the importer. A standard indemnity from client stating
irrevocably and unequivocally to accept the documents with or without discrepancies should also be
obtained.

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 The Stamp Act 1899
(Important provisions)

Introduction:
An Unstamped document or one bearing insufficient stamp is almost a Scrap of paper in the eye of
Law. Any person staking his claim in the basis of such document will not be entitled to any relief
through the process of law.

The stamp Act,1899 was enacted in order to consolidate and amend the law relating to stamps. It
came into force on the first day of July, 1899.

The stamp Act is purely a Fiscal policy of the Govt. It plays an important role in Government revenue
earning. Its sole object is to increase the revenue and all its provisions must be construed as having in
view the protection of revenue of the Govt.

Some of the Important Sections/ provisions of the Stamp Act1899 relating to banking are discussed in
details for improvement of the knowledge of the banker, so that , they can be able to perform their
duties lawfully and accurately.

The important sections of the Act:

a. Section 2 (11) duly Stamped :

b. Section 2(14) Instrument:
c. Section 3 Instrument Chargeable with duty:
d. Section 5 Instrument relating to several distinct matters:
e. Section 6 Instrument coming within several descriptions in Schedule 1:

f. Section 11, states that the following instrument may be stamped with adhesive stamps:
i. Instrument chargeable with the duty of (10 paisa or 5 paisa) except of bill s of exchange
otherwise than on demand and drawn in sets.
ii. Bill of Exchange , promissory Notes drawn or made out of Bangladesh.
iii. Entry as an advocate on the roll pf the Supreme Court.
iv. Notarial Acts and
v. Transfers by endorsement of shares in any incorporated company or other body corporate.

Section 12 (1) ( a): Cancellation of adhesive stamps: Whoever affixes any adhesive stamp to any
instrument chargeable with duty which has been executed by any person shall , when affixing such
stamp cancel the same so that it cannot be used again; and

(b) whoever executes any instrument on any paper bearing an adhesive stamp shall at the time of
execution , unless such stamp has been already cancelled in the manner aforesaid, cancel the
same so that it cannot be used again.

(2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used
again shall , so far as such stamp is concerned , be deemed to be unstamped.
(3) The person require by sub – section (1) to cancel an adhesive stamp may cancel it by writing on or
across the stamp his name or initials or the name or initials of his firm with the true date of his so
writing or in any other effectual manner.

Section 13: Instruments stamped with impressed stamps how to be written:

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 Section 29: states: Duties by whom payable.
Section 31: (1) Adjudication as to proper Stamp:
Section 33:(1) Examination and impounding of instrument:
Section 35: Instrument not duly stamped inadmissible in evidence etc.
Section 43 prosecution for offence against stamp-law:
Section 62: (1) Penalty for executing etc. instrument not duly stamped

A person:
a) drawing, making, issuing, endorsing or transferring or signing otherwise than as witness or
presenting for acceptance of payment or accepting paying or receiving payment of or in any manner
negotiating any bill of exchange payable otherwise than on demand or promissory not without the
same being duly stamped ; or
b) executing or signing otherwise than as a witness any other instrument chargeable with duty without
the same being duly stamped: or

c) Voting or attempting to vote under any proxy not duly stamped; shall for every such offense be
punishable with fine which may extend to five hundred Taka.

Section 63: penalty for failure to cancel adhesive stamp: Any person required by section 12 to
cancel on adhesive stamp and failing to cancel such stamp in manner prescribe by that section, shall
be punishable with fine which may extend to one hundred taka.

Kind of Stamps:
Stamps are classified as follows:

i. Judicial Stamp- They are of special mark used in the Court.

ii. None –Judicial Stamp- They are printed on special paper in different denominations by the Govt.
and used for execution agreements are Indemnity bond, Sale deeds, Mortgage deeds, Agreement,
Contract etc,
iii. Adhesive Stamp: A The Adhesive Stamps are Revenue Stamp and Postage. They are affixed on
the document by gum.

Use of adhesive stamps: The following instruments may be stamped with adhesive stamps, namely:
a) Instruments chargeable with the duty of (fifty) paisa or any other denomination) except parts of bills
of exchange payable otherwise than on demand and drawn in sets;
b) bills of exchange and promissory notes drawn or made out of Bangladesh.
c) entry as an (advocated on the roll of the supreme Court.
d) Notarial acts‟ and transfers by endorsement of shares in any incorporated company or other body
corporate.

iv. Embossed or impressed: These Stamp are embossed/ engraved or impressed by Collectorate of
the State. Bankers generally use printed presented forms for documentation. These printed Standard
Forms like letter of Continuity.

Letter of pledge of goods, Letter of Hypothecation of goods, Letter of Lien, Letter of Guarantee etc. are
sent to the Collectorate (treasury) with the requisite amount of stamp duty in cash or pay order by the
bank. The Collectorate (Treasury) men impressed or engrave stamps on the documents according to
the stamp duty prevailing in the state at the time.
At the time of making issuing executing any document as stated above banker should follow the
prevailing current rate of stamps duty which may change from time to time by the Government.
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 The Registration Act, 1908
(with recent amendments, Important Provisions)

Sec- 1. (3): The Registration Act, 1908 came into force on the first day of January, 1909.
Sec- 3. (1): The Govt. shall appoint an officer to be the Inspector General of Registration for Bangladesh.
Sec- 6: The Govt. may appoint Registrars of several districts and to be Sub-Registrars of several sub-
districts.
Sec- 15.: the Registrars and Sub-Registrars shall use a seal bearing “ The seal of the Registrar (or of the
Sub-Registrar) of District; SAY “Satkhira”.
Sec- 16: Registrar-books and fire-proof boxes: The pages of the Registrars shall be consecutively numbered
in print, and the number of pages in each book shall be certified on the title page by the officer by whom
such books are issued.

The govt. will supply fire proof box in each district and make suitable provision for safe custody of records
connected with the registration of documents.

Section 17. Documents of which registration is compulsory:

17. (1) The following documents shall be registered, if the property to which they relate is situate in a district
in which, and if they have been executed on or after the date on which, 7[ * * *] this Act came or comes into
force, namely:-

(a) instruments of gift of immoveable property;

(aa) declaration of heba under the Muslim Personal Law (Shariat);]

[ (aaa) declaration of gift under the Hindu, Christian and Buddhist Personal Law;]

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or
extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, 10[ * * *] to
or in immoveable property;

Explanation − In the case of an assignment of a mortgage the consideration for the deed of assignment
shall be deemed to be the value for registration.

(c) Non-testamentary instruments (other than the acknowledge-ment of a receipt or payment made in
respect of any transaction to which an instrument registered under clause (o) relates) which acknowledge
the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or
extinction of any such right, title or interest; and

(cc) instrument of mortgage referred to in section 59 of the Transfer of Property Act, 1882;

(d) leases of immoveable property from year to year, or for any term exceeding one year, or reserving a
yearly rent;

(e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award
when such decree or order or award purports or operates to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or interest, whether vested or contingent, 12[ * * *] to or in
immoveable property;

[ (f) instrument of partition of immovable property effected by persons upon inheritance according to their
respective personal laws;

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(g) instrument of sale in pursuance of an order of the Court under section 96 of the State Acquisition and
Tenancy Act, 1950:

Provided that the Government may, by order published in the official Gazette, exempt from the operation of
this sub-section any leases executed in any district, or part of a district, the terms granted by which do not
exceed five years and the annual rents reserved by which do not exceed fifty taka.

(2) Nothing in clauses (b) and (c) of sub-section (1) applies to-

(i) any composition deed; or

(ii) any instrument relating to shares in a Joint Stock Company, notwithstanding that the assets of such
Company consist in whole or in part of immoveable property; or

(iii) any debenture issued by any such Company and not creating, declaring, assigning, limiting or
extinguishing any right, title or interest, to or in immoveable property except in so far as it entitles the holder
to the security afforded by a registered instrument whereby the Company has mortgaged, conveyed or
otherwise transferred the whole or part of its immoveable property or any interest therein to trustees upon
trust for the benefit of the holders of such debentures; or

(iv) any endorsement upon or transfer of any debenture issued by any such Company; or

(v) any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or
interest 14[ * * *] to or in immoveable property, but merely creating a right to obtain another document which
will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or

(vi) any decree or order of a Court except a decree or order expressed to be made on a compromise and
comprising immoveable property other than that which is the subject-matter of the suit or proceeding; or

(vii) any grant of immoveable property by the Government; or

(viii) any instrument of partition made by a Revenue-officer; or

(ix) any order granting a loan or instrument of collateral security granted under the Land Improvement Act,
1871, or the Land Improvement Loans Act, 1883; or

(x) any order granting a loan under the Agriculturists' Loans Act, 1884, the Bangladesh Krishi Bank Order,
1973 or under any other law for the time being in force relating to the advancement of loans for agricultural
purposes, or any instrument under which a loan is granted by a co-operative society for any such purpose,
or any instrument made for securing the repayment of a loan so granted; or

(xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the
mortgage-money, and any other receipt for payment of money due under a mortgage; or

(xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or
Revenue-officer; or

(xiii)any counter-part of a lease, where the lease corresponding thereto has itself been registered.

(3) Authorities to adopt a son, executed after the first day of January 1872, and not conferred by a will, shall
also be registered.

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Section 17A. Registration of contract for sale, etc:

17A. (1) Notwithstanding anything to the contrary contained in this Act or any other law for the time being in
force, a contract for sale of any immovable property shall be in writing, executed by the parties thereto and
registered.

(2) A contract for sale referred to in sub-section (1) shall be presented for registration within thirty days from
the date of execution of the contract and the provisions regarding registration of instruments shall apply.
17B. Effect of unregistered contract for sale executed prior to section 17A becomes effective:
17B. (1) Where a contract for sale of immovable property is executed but not registered prior to coming into
force of section 17A-

(a) the parties to the contract shall, within six months from the date of coming into force of that section,-

(i) present the instrument of sale of immovable property under the contract for registration, or

(ii) present the contract for sale itself for registration; or,

(b) either of the parties, if aggrieved for non compliance with any of the provisions mentioned in clause (a),
shall, notwithstanding anything contained to the contrary in any law for the time being in force as to the law
of Limitation, institute a suit for specific performance or recession of the contract within six months next after
the expiry of the period mentioned in clause (a),

failing which the contract shall stand void.

(2) The provision of sub-section (1) shall not apply to any contract for sale of immovable property on the
basis of which a suit has been instituted in a civil court before coming into force of section 17A.]

Sec 17 (2) Documents of which registration is not required:

i) Any decree or order of Court (except compromise)

ii) Any grant of immovable property by the Government
iii) Any instrument of partition made by a Revenue Officer; or
iv) grant of immovable property by the Government
Any order granting a loan under the Agriculturists Loan Act, 1884, the Bangladesh Krishi Bank Order,
1973 or any law for the time being in force.
Any endorsement on a mortgage deed acknowledging the full or partial payment of mortgage money.
Any other receipt for payment of money due under a mortgage.
Any certificate of Sale granted to the purchaser of any property sold by public auction by a Civil or
Revenue Officer or
viii) Any counter-part of a Lease, where the Lease corresponding thereto has itself been registered.

Section 22A. Instrument of transfer:

22A. (1) Every instrument of transfer required to be compulsorily registered under this Act shall contain the
particulars necessary to convey the intention of the parties, complete description of the properties to be
transferred and nature of the transaction.

(2) Photographs of both the executants and the recipient shall be pasted on every instrument and the parties
shall sign and put their left thumb impressions across their photographs in the instrument [ :

Provided that if any party is incapable of signing, he shall not be required to sign.]

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(3) The government shall, within three months of coming into force of the Registration (Amendment) Act,
2004 by notification in the official Gazette, prescribe a format for the purposes of this section.]

Section 23. Time for presenting documents:

23. Subject to the provisions contained in sections 24, 25 and 26, no document other than a will shall be
accepted for registration unless presented for that purpose to the proper officer within 19[ three months] from
the date of its execution:

Provided that a copy of a decree or order may be presented within 20[ three months] from the day on which
the decree or order was made, or, where it is appealable, within 21[ three months] from the day on which it
becomes final.

Section 52A. Registering Officer not to register unless certain particulars are included in an
instrument of sale:

52A. Upon presentation of an instrument of sale of any immovable property, the Registering Officer shall
not register the instrument unless the following particulars are included in and attached with the instrument,
namely-

(a) the latest khatian of the property prepared under the State Acquisition and Tenancy Act, 1950, in the
name of the seller, if he is owner of the property otherwise than by inheritance;

(b) the latest Khatian of the property prepared under the State Acquisition and Tenancy Act, 1950, in the
name of the seller or his predecessor, if he is owner of the property by inheritance;

(c) nature of the property;

(d) price of the property;

(e) a map of the property together with the axes and boundaries;

(f) a brief description of the ownership of the property for last 25 (twenty-five) years; and

(g) an affidavit by the executants affirming that he has not transferred the property to any person before
execution of this instrument and that he has lawful title thereto.

Section 78A. Registration fee for contract for sale, heba and mortgage

78A. Notwithstanding anything contained in section 78 or any other law for the time being in force,-

(a) registration fee payable for registration of a contract for sale of any immovable property shall be-

(i) five hundred taka, where valuation of the property is not more than five lakh taka;

(ii) one thousand taka, where valuation of the property is above five lakh taka and not more than fifty lakh
taka; and

(iii) two thousand taka, where valuation of the property is above fifty lakh taka;

(b) registration fee payable for registration of a declaration of heba of any immovable property under the
Muslim Personal Law (Shariat) shall be one hundred taka irrespective of the value of the property, if such
heba is made between spouses, parents and children, grand parents and grand children, full brothers, full
sisters and, full brothers and full sisters;

15
[ (bb) registration fee payable for registration of a declaration of gift of any immovable property made under
the Hindu, Christian and Buddhist Personal Law, if such gift is permitted by their Personal Law, shall be one
hundred taka irrespective of the value of the property, provided such gift is made between spouses, parents
and children, grand parents and grand children, full brothers, full sisters and, full brothers and full sisters ;]

(c) registration fee payable for registration of an instrument of mortgage referred to in section 59 of
the Transfer of Property Act, 1882 shall be as follows-

(i) Where the amount of money to be secured does not exceed five lakh taka:1% (one per centum) of
the amount of money to be secured, but not less than two hundred taka and not more than five hundred
taka;
(ii) Where the amount of money to be secured is above five lakh taka but does not exceed twenty
lakh taka: 0.25% (zero point two five per centum)of the amount of money to be secured, but not less
than fifteen hundred taka and not more than two thousand taka;
(iii) Where the amount of money to be secured is above twenty lakh taka: 0.10% (zero point one zero
per centum)of the amount of money to be secured, but not less than three thousand taka and not more
than five thousand taka;

Section 78B. Registration fee for instrument of partition:

[78B. Notwithstanding anything contained in section 78 or any other law for the time being in force, fee
payable for registration of an instrument of partition of immovable property shall be-

(i) five hundred taka, where valuation of the property is not more than three lakh taka;
(ii) seven hundred taka, where valuation of the property is above three lakh taka and not more than ten
lakh taka;
(iii) twelve hundred taka, where valuation of the property is above ten lakh taka and not more than thirty
lakh taka;
(iv) eighteen hundred taka, where valuation of the property is above thirty lakh taka and not more than
fifty lakh taka;
(v) two thousand taka, where valuation of the property is above fifty lakh taka.]

Sec 17 (1) Documents of which registration is compulsory:

b) Instruments of gift of immovable property;

c) Other non-testamentary (a thing which does not provide clear proof of something) instruments which
purport (to claim or pretend or to be intended to appear as something) or operate to create, declare,
assign, limit or extinguish whether in present or in future, any right, title or interest, whether vested or
contingent, of the value of Taka one hundred and upwards to or in immovable property.

d) Non-testamentary instruments which acknowledge the receipt or payment of any consideration on

account of the creation, declaration, assignment, limitation of extinction of any such right, title or
interest; and

e) Leases of immovable property from year to year or for any term exceeding one year, or reserving a
yearly rent.

16
f) Non-testamentary instruments transferring or assigning any decree or order of a Court or any award
when such decree or order or award purports or operates to create, declare, assign, limit or extinguish
whether in present or in future, any right, title or interest, whether vested or contingent, of the value of
Taka one hundred and upwards to or in immovable property.

g) The Govt. may by Gazette notification exempt the requirement of registration of Lease Agreement
which do not exceed five years in any District.

(3) Authorities to adapt a son, executed after the first day of January, 1872 and not
conferred by a will, shall also be registered.

Difference between testamentary and non-testamentary documents:

A testamentary document is a Last Will and Testament or some other document that meets the statutory
requirements of a will. A testamentary trust is one that is set forth in a will and may continue long after the
death of the testator. Many wealthy testators maintain control over their property after death through
testamentary trusts.

Non-testamentary documents would be documents that are not related to a Last Will and Testament.

What is the difference between Documents and Record?

In the simplest form, a document is a written piece of work that follows a structure (e.g. index, main body,
conclusions and recommendations) that has been designed to capture information in order to...

What are the differences between records and documents?

National Archive of Scotland website: A document is any piece of written information in any form, produced
or received by an organisation or person. It can include databases, website, email messages….

17
 Insolvency Act, 1997
(Important Provisions)

Why and what is Insolvency Act?

In credit transactions and lending by the Banks and financial institutions there are many reasons for
non-payment by the debtors. In many cases the debtors becomes permanently incapable to pay back
the creditors‟ money because of many reasons like over-expansion, irregularity, sluggish market
condition, depression, management failure, technological obsolesce etc.

Under this Law the Creditors are given to go to the Court to get the debtor declared insolvent and
realize money by selling his properties and assets.

On the other hand the debtors are also given the opportunity to declare themselves insolvent voluntarily
through the Court.

Insolvency Act, 1909 (Act III of 1909), Insolvency Act, 1920 (Act V of 1909), Insolvency Act, 1997 (Act
X of 1997, effective from 1st August, 1997).

The District Judge will act as judge on matters arising out of insolvency in his area of his jurisdiction. The
court will exercise full authority to decide on such cases.

Duties of Debtor:

a) Submit his books of accounts

b) Submit the list of his properties, creditors and their dues, and debtors and their dues.
c) Produce himself before the Court for interrogation by the Receiver.
d) Execute documents with regard to his properties
e) Do all other works necessary.

Consequences of Insolvency:
a. The Insolvent shall cooperate with the court in the disposal of his assets for distribution among
the creditors.
b. All the properties except properties exempted properties, will vested with the receiver or in the
court in absence of receiver for distribution among the creditors.
c. During pendency of insolvency suit, no creditor can initiate any case against exempted properties
of the debtor for dues under trial except with the permission of the court.
d. Secured Creditors will be entitled to normal courses for realization of the dues. Nothing will restrict
their rights.
e. Declaration will be effective from the date of filing suit.

Some Property of Debtor to be exempted:

Some properties of the debtor will be beyond the scope of the Act. Possession of the following
properties cannot be taken, neither these will vest in the Receiver(Sec – 32):

a. Machinery used by the debtor himself.

b. Clothes, domestic appliances and essentials of the debtor, his wife, sons and daughters totaling
three persons (1+2) maximum worth Tk 3.00 Lac.
c. Residential House measuring 2,500 sft floor area in urban areas or 5,000 sft in rural areas.

Persons not to be insolvent:

18
a. Jatio Sangsad and Judiciary including Government organizations.
b. Charitable and religious organizations.
c. Non-profit statutory organizations
d. Autonomous bodies of Govt.

Insolvent to be discharged from all Liabilities:

The court, in case of an insolvent who is an individual, can order discharging him from all demands,
dues and liabilities.

After declaration of insolvency, the Court shall appoint a Receiver from among the list of persons
maintained and approved by the Government.

However he will not be discharged from the following liabilities:

a. Government dues
b. Liability / dues created by a debtor through fraud or fraudulent breach of trust.
c. Liability arising out of any rebate received by fraud
d. Liability in connection with maintenance for divorced wife and children as per Family Court
Ordinance, 1985.

Status of a declared insolvent:

Not be nominated to the parliament or local govt. or statutory bodies.

Cannot be appointed or allowed to work as Judge, Magistrate, Justice of the Peace or Public Servant.
Cannot be appointed as Receiver.
Cannot take loan from any bank or financial institutions.

Others:

After declaration of insolvency, the Court shall appoint a Receiver from among the list of persons
maintained and approved by the Government.

The Court can rescind (revoke) the order declaring someone as insolvent, if it is satisfied that the earlier
order was not justified or the debtor has paid back dues.

After declaration the court may pass the order for the arrest of the insolvent.
The court may rearrange the debts between the creditors and declared insolvent.
The court may constitute a committee of five creditors, if number of creditors is ten or above to help the
Receiver in discharge of his duties.

Eligible Creditors: Who singly or jointly has / have placed before debtor the claim for payment of
overdue amount of at least Tk 5.00 Lac
Nobody will be entitled to file a suit unless he is a eligible Creditor.

Declaring incapacity to pay off debts, a debtor having a debt of minimum Taka 20.00 Lac may file suit
before the Court to be declared insolvent.

19
 The Limitation Act, 1908
(Important provisions)

Basically Law of Limitation was enacted by the British Indian Government in the year 1908 and the
law was adopted in Pakistan & then in Bangladesh in the year 1972.
The main objectives of the Limitation Act is to prescribe the period within which existing rights of the
Creditor can be enforced in a court of law. An unlimited and perpetual threat of litigation creates
insecurity & uncertainly. Lord Kenyon described a statute of limitation as a statute of repose. The
statute of Limitation was intended for relief and quiet of defendants and to prevent person from
being harassed, at a distant period of time, after the committing of injury claimed. The objective is
prevention of the raising up of claims at great distances of time when evidence is lost. The Law of
Limitation being a disabling law the limitation has to be found within the four corners of the Act. It is
a procedural law. Its application is prospective in operation and this law alert both the party about
their duty & rights for settlement of a dispute. The Law of Limitation is inexorable & cruel, it may
deprive the creditor but legitimate. Therefore if, any suit or claim is once barred it is ever barred.
The law of Limitation acts as silent giants which cut off the rights of creditors in the course of time.

The Limitation Act, 1908 contains 32 Sections & 137 Articles. Suits are covered by Articles 1 to 113.
Appeals air covered by Articles 114 to 117 and, the applications are covered by Articles 113-to 137.
On a general analysis, the articles of the Act divided I to 10 (ten) classes.

SI Suits Nature Related Articles

1. Suits relating to Accounts Artier I to 5
2. Suits relating to Contacts Articles, 6 to 55
3. Suits relating to Declarations Articles 56 to 58
_
4. Suits relating o Decrees & Instruments Articles 59 to 60
5. Suits relating to Immovable Property Articles 61 to 67
6. Suits relating to Moveable Property Articles 68 to 71
7. Suits relating to torts Articles 72 to 91
_
8. Suits relating to Trust and trust property Articles 92 to 96
g.
9. Suits relating to Miscellaneous matters Articles 97 to 112
~_
10. Suits for which there is no prescribed period: Article -113

The scheme of the articles of Law of Limitation 1908, is that each one of these articles has three
columns. The first column prescribes the nature of the suits and proceedings, the second column
mentions the period of limitation anal third column mentions the starting point of such limitation.
THE SCHEDULE (Period of Limitation) Section - 2(i) and 3

20
The periods of Limitation prescribed in this schedule are to be computed subject to the provisions
contained in the body of the Act. So the period of limitation prescribed in this schedule lapses not on
the expiry of the definite number of months/ years prescribed therein but on the expiry of the
numbers of month / year together with the time which is excluded from calculation. For the
calculation from which date period begins to run that will be excluded.

Some important Articles from Schedule:

Sl. Description Period of Time from which period
No. of Suits Limitation Begins to run
56 Far money payable for money lent. Three When the loan is made. '
years
57 Like suit when the lender has given a Three When the cheque is paid.
cheque for the money. years
59 For money lent under an agreement that shall Three
be payable on demand. years
60 _
For money deposited under an agreement that Three When the demand is made
~!cars~
it shall be payable on demand including years
money of a customer in hands of- his banker
69 so payable.
On Bill of. Exchange, on Promissory Note Three When the bill or note falls due
payable at fixed time after date. years
T
70 On Bill of Exchange payable at sight, Three When the bill is presented
or after sight but not a fixed time. years
71 On Bill of Exchange accepted payable at a Three When the bill is presented at the place.
particular place. years
72 On Promissory note, on Bill of Exchange payable Three 'When the fixed time expires.
at fixed time after sight or after demand. years
74 On Promissory note or Bond payable Three The expiration of the first term
by installments years of payment as to the part then payable; and
the other parts, the expiration of the
respective terms of payment.
75 On Promissory Note or Bond payable by Three When the default is made unless
installments, which provides that if default be years where the payee or oblige waives the
made in payment of one or more ;installments benefits of the provision & then when
the whole shall be due. fresh default is made in respect of
which there is no such waiver.
76 On Promissory Note given by the maker to Three The date of the delivery to the payee. I
third person to be delivered to the payee after a years
certain event should happen.

78 By the payee against the drawer of Bill Three The date of the refusal to accept.
of exchange, which has been dishonored by Years
non-acceptance.

21
105 a) to recover the surplus collection Three When the mortgagor renters on
received by the mortgagee after the years the mortgage property.
mortgage h0's been satisfied

132 To enforce payment of money secured by Twelve When the money sued for
mortgage or otherwise charged upon years becomes due.
immovable property.
147 By a mortgagee Twelve When the money secured by the
a) for Fore-closure. years mortgage becomes due.
_
144 b) For possession of immovable property Twelve When the mortgagee becomes
mortgaged. years entitled to possession
146 To set aside a sale by a Civil / Revenue One year When the sale is confirmed or would
Court or a sale for arrears of Govt. revenue otherwise have become final &
or for any demand recover-able as such conclusive had no such suit been
arrears brought.
152 Appeal against Decree . 30 days The date of Decree against
a) As per Civil Procedures Code- 1908 which appealed for.
in the Court of District Judge

182 b) Filing a suit for Execution of Three From the date of decree / order
Decree of Civil Court. years

132 By the mortgagor: Thirty When the right to redeem or to

a) to redeem or recover the possession of years recover possession accrues.
immovable property mortgaged.

134 b) To recover the possession of immovable Twelve When the transfer becomes known
property mortgaged & afterwards years to the party.
transferred by the mortgagee for a valuable
consideration.

SOME SPECIAL FEATURES

 The period when court is closed for any reason is excluded while computing the limitation period in sue
h cases suits should be filed on the date of reopening of the court.
 The prescribed periods of limitation cannot be extended or waived by mutual agreement.
 The banker's right to general lien, set off or sale of pledged goods is not barred by the law of
limitation.
 If the principal debtor’s document: becomes time barred, the banker can recover the dues from
the guarantee document if it is still current.
 In case where the documents are executed by joint borrowers on different dates the limitation
period as far as the firm is concerned, begins from the earliest date.
 Installments credited by the bank as per the standing instructions of the debtor does not amount
to part payment for the purpose of extension of limitation period.
 If the borrower resident abroad but it was not possible for the part of lender to trace out him in
this case of counting period will be started from his entrance in the country.
22
 In case of minors rights an debt counting of limitation period will start from his attainment of
majority.
 Suits against trustees & their representatives are not barred by any limitation.
 The Law of Limitation applies both to set-off and counter claim.

Extension of prescribed period in certain eases :( sec -5) :

Under the above section what constitutes " Sufficient Cause" (Provisions of the Code of Civil Procedures
1908 order (XXI) by which applicant can satisfy the Court. Sufficient causes are:

 Illness: If it can be proved that the man was utterly disable to attend duty.
 Imprisonment: Imprisonment in a criminal case may be a sufficient, cause and the time spent in the
jail will be deducted.
 Mistake: by Court Officer, by legal practitioner & Ignorance of Law:
 Wrong proceedings in good faith or proceeding in wrong court.
 Judgment not pronounced in open court.
 Inability to get stamps may prove sufficient causes under section -5.
 Legal disability: Section -6 covers Insanity and Minor.

In computing the period Limitation some important points is contained in the following sections:
Section 12: Exclusion of time in Legal proceedings that is computing the period of limitation for any
suit, appeal or application.

Section 13: Effect of acknowledgement of debt in writing computing the period of limitation. Where
before the expiration of the prescribed period for a suit the borrower acknowledge & undertakes to
pay the liability, a fresh period of limitation shall be computed from the time when the
acknowledgement was so signed.

Section 18: Acknowledgement of liability by person liable to pay the debts has limitation against him
only not against others who are also liable to pay the debts; whereas part payment save, limitation
even against others.

23
 Land Laws and Documentations
Homestead (Bastu Bhita): Homestead includes the dwelling / living house and attached yard, garden,
prayer room, family graveyards, agricultural and horticulture garden, outer phase of the house or open
space within home boundary.

Mouza: The Mouza consists of a village or small town or part thereof. The big towns and cities are devided
in many Mouzas.

Plot or Daag: To keep record of the description, keep accounts and keep identity of all the Land, the land is
divided into various different separate pieces. These pieces are called Plot in English and Daag in Bengali.
The land size of plots may be different and it may be of different geometrical shapes. Every plot under
Mouza has a serial number, this number is called Plot or Daag number.

Khatian: Khatian is an account number of the land owner by which number the rent and taxes are collected.
Khatian is issued on a Prescribed form the Settlement or Revenue Officer having an account number
allotted to the land owner by which number the rent and taxes are collected:

Khatian includes:

–Name of District, Thana, Mouza, J.L. (Jote Land) number

–Name of Land owner, father‟s name, address
–Khatian number (No 1 Khatian belongs to Govt.)
–Portion of the owner in whole or fraction (Hissa)
–Quantum of Land in decimal
–Daag number
–Type of Land --- Bastu, Naal, Agri., Bilan, Punker, Garden, forest
–Total quantum of land in a Daag
–Quantum of Land of the Khatian of the said Daag
–Amount of yearly rent or Khazna
–Montobya or Comment
–Signature and seal of the Settlement or Revenue Officer.

Waqf Estate: The Land which is given as complete gift for the Mosque, Madrasa or any type of social or
religious purpose is called Waqf Estate. The nominated Motowalli administer the Waqf Estate.

Debotto Estate: The Land which is dedicated for the Hindu Debotto is called Debotto Estate. As the Debotto
is considered minor his /her property is not generally transferable except a few exceptions.

Diluvion Land (Sikosti --- land erosion): This is the land which is destroyed by river or sea erosion. Any
Raiyat will have land of right for the next 20 years from erosion. Any when the Land will emerge again within
20 years by paying 4 years‟ rent he may be the legal owner and possessor again if somebody‟s total land is
not more than 60 Bigha.

Alluvion Land (Poyosti -- increase of land): When the land increases slowly it by the siltation is called
Alluvion land. As per the latest Amendment and Government the Alluvion land will be treated as Govt. Khas

Collector: Deputy Collector is the Deputy Commissioner of the District appointed by the Government.
State Acquisition & Tenancy Act 1950

To eradicate the traditional Zamindari system where the Zamidars were the middlemen of collecting taxes
for the Govt.

To acquire the estates of the Zamidars.

24
 To recognize the farmers as the owner of the Land .
To stop the creation of new tenant in the land.
To improve the financial position of the farmers.
To create one type of Raiyat.
To vest the khas land in the hands of the Government.
To increase the Land Revenue. Govt. will be the collector of the land revenue instead of the Zamidars,
Talukdars etc.
To take the power of increase or decrease of land rent with the Govt.
To prepare a maximum ceiling of Land per family.
To save the general people from the exploitation of the Naib or Gomosta of Zamidars.

Land Surveys in Bangladesh

• Cadastral Survey (CS), 1930: Primary and most dependable Survey and basis of all land records.
• State Acquisition (SA)
 Revisional Settlement Survey (RS) 1966-67
 Zonal Survey (ZS) 1950
• Bangladesh Survey (BS), 1980
• Records the latest land demarcation and plots, and the landscape changes.
• Gives Field (Maat) Porcha, and after finalization printed Porcha is published by the Government.

Cadastral Survey (CS): Under the Bengal Tenancy Act 1885 Cadastral Survey (CS) was undertaken by the
government during 1890 – 1940 at different districts of Bangladesh. The special feature of the this Survey
is that the Mouza map was prepared on the basis of physical verification of each plot, Mouza border and
geographical locations. As no direct physical measurement/ verification or survey was done before so each
and every plot of land was measured physically. And 100% land was measured by the Survey team. Along
with the survey of each plot of land the information like, the quantum of land, type of land, upper owner, the
type of the possessing Roit/ tenant, amount of tax/rent paid etc. were also included; and the survey was
done in public. That is why the Cadastral Survey (CS Survey) is well accepted and appreciated
everywhere.

The CS Survey was carried out on test basis during 1888- 90 in the Ramu Thana under Cox‟s Bazar District.
The outcome was so successful; on the basis of the experience gathered the CS Survey was carried out in
the greater Chittagong District during 1890-98. The CS continued in other districts of Bengal and the last CS
was carried out in Dinajpur District and completed there in 1998.

Deeds and Documents relating to Land

FIRST CATEGORY

* Heba or Gift Deed

* Patta Deed
* Amal Nama
* Cheq Muley Bandobasta (Land sold for rayati title by the Zamidars to their tenants)
• Registered or Sub Kowla Deed
* Lease or Tenancy Deed
* Registered Lease Deed by RAJUK/ CDA/ KDA/ BSCIC etc.
* Porcha (CS, SA, RS, BS (Govt. Printed)) and Draft or Mat Porcha (DP Khatian); Bujrukh Porcha
* Non-Encumbrance Certificate (NEC)
* Legal Opinion on the proposed mortgageable Land
25
SECOND CATEGORY

* Baina Nama / Registered Baina Nama / MOU

* Baya Deed, the deed(s) executed in favour of previous Land Owner(s)
* Token / Receipt against Registered Documents (as per Section 52 Kha of SA & T Act 1950)
* Non-Judicial Stamp Duty Challan / PO; VAT Challan / PO, Gain Tax PO; Registration Fee
Challan / PO; Mutation Fee
* Nam Jari Prostabona
* D.C.R. (Duplicate Carbon Receipt)
* Mutation from Asstt. Commissioner, Land Office
* Mutation from Works Ministry / DIT / KDA / BSCIC etc. in case of Govt. Lease Hold Property.
* Khazna (Land Rent) Receipt issued by Tahashil Office

THIRD CATEGORY

* Civil Court Decree / verdict

* Civil Court Decree / verdict
* Partition Deed
* Will & Probate
* Nilam or Auction Documents

FOURTH CATEGORY

* Mortgage Deed and Mortgage Redemption Deed

* Intimation of Mortgage / Redemption to RJSCF (In case of Limited co. & Partnership Firms)
* Board Resolution in case of Mortgage of Limited Company Land / Partnership Firms
* Registered Power of Attorney (Limited / Comprehensive, irrevocable)
* Registered Irrevocable Power of Attorney between Land Owner and Developer

FIFTH CATEGORY

* Tripartite Agreement among Financial Institution, Borrower and Developer/ Land Owner
* Letter of Allotment of Plot of Land / Flat by RAJUK/ CDA/ KDA/ BSCIC etc
* NOC in case of Change of Civil Plan, developing for flat; changing nature of use; transfer;
assignment; mortgage; mortgage redemption from RAJUK/ CDA/ KDA/ BSCIC etc.

SIXTH CATEGORY

* Waresh cum Certificate, normally issued by Union Council, Municipality or City Corp.
* Mouza Map
* Chowhoddi: the description of land beside the said land.
* Letter of possession by the Government Authority/ by Developer
* Govt. Certified copy (Nokol) of Deed, Power of Attorney, Porcha
* RAJUK/ CDA/ KDA/ BSCIC Plan / Architectural Design
* Valuation Certificate from Enlisted Surveyor
* Utility Clearance and supply from concerned Agencies
* Municipal Holding / Union Parishad Tax paid Receipt.

26
 Prevention of Money Laundering and
Combating Financing Terrorist & Terrorism Issues

1. What is Money Laundering? Ans:

cÖ_gZt m¤ú„³ Aciva msNU‡bi gva¨‡g cÖvß A_© ev m¤úwËi A‣ea cÖK…wZ,Drm, Ae¯’vb, gvwjKvbv I wbqš¿Y
†Mvcb Kwiqv Dnv †`‡ki A_©bxwZi g~j cÖev‡n wewfbœ ¯Í‡i (†cøm‡g›U, †jqvwis I Bw›U‡MÖkb) hy³ Kiv ev hy³
Kivi cÖ‡Póv ev Ac‡Póv‡K gvwb jÛvwis e‡j|

wØZxqZt •ea ev A‣ea Dcv‡q AwR©Z A_© ev m¤úwË A‣eafv‡e we‡`‡k cvPvi A_ev ÁvZmv‡i Acivajä
Av‡qi A‣ea Drm Avovj ev †Mvcb Kwievi D‡Ï‡k¨ D³ A_© ev m¤úwË we‡`‡k ‡cÖiY ev we‡`k nB‡Z †`‡k
Avbvqb KivI gvwb jÛvwis|

Z…ZxqZt Aciva msNUbKvix‡K AvBbMZ e¨e¯’v MÖnY nB‡Z i¶vi D‡Ï‡k¨ mnvqZv Kiv, gvwb jÛvwis
AvB‡bi eva¨evaKZv cwinv‡i Kvh©µg MÖnY Kiv, •ea ev A‣ea A_© ev m¤úwËi n¯ÍvšÍi, ¯’vbvšÍi ev iƒcvšÍ‡i
mnvqZv ev cÖ‡ivwPZ Kiv, gvwb jÛvwisK„Z m¤úwË n¯ÍMZ Kiv, m¤úwËi mv‡_ RwoZ _vKv, Acivajä Av‡qi
Drm Avovj ev †Mvcb Ki‡Y mnvqZv Kiv|

PZz_©Zt Aciva msNU‡b Ask MÖnY, m¤ú„³ _vKv, loh‡š¿ wjß _vKv, Aciva msNU‡bi cÖ‡Póv A_ev m¤ú„³
Aciva msNUbKvix‡K mnvqZv Kiv, Acivax‡`i DrmvwnZ ev cÖ‡ivwPZ Kiv ev civgk© cÖ`vb Kiv, BZ¨vw`I
gvwb jÛvwis Aciv‡ai g‡a¨ c‡o|

As per Section - 2 ( d ) of Money Laundering Prevention Act, 2012 Money Laundering is:

a) Knowingly earning of Assets and Properties as proceeds of Crime or Offence through

Placement, Layering and integration with the following objectives:
i. To conceal the nature, source, location, ownership and control of proceeds of crime.
ii. To help any person to save from legal proceedings who has committed the predicate
offence.
b) To send abroad legally and illegally earned assets or properties in unlawful manner.
c) To transfer, bringing in or sending out abroad knowingly the proceeds of Predicate Offences
with an objective to conceal the illegal sources.
d) To perform any activity or try to perform these sort of activities to avoid the requirement of
reporting to the appropriate authority (Structuring).
e) To transform, transfer, relocation of legally or illegally earned properties in order to instigate
Predicate Offences.
f) To take over or receive, possess or to enjoy these type of illegally earned properties.
g) To act in such a way as to conceal the source of illegally earned wealth.
h) To take part, integrate, conspire, try to conspire or help in it or instigate or give advice
committing any of the above offences.

27
2. What are the Predicate Offences? Ans:
1 Corruption and bribing
2 Counterfeiting Notes and coins (PC 489 A- E))
3 Counterfeiting Documents (PC 471- 476)
4 Extortion (Collecting illegal tolls)
5 Cheating (PC 415-424)
6 Forgery (PC 463- 469)
7 Illegal Arms trade
8 Illegal trade of Narcotics and psychotropic substances (Drugs)
9 Illegal trade of stolen and other properties (PC 410- 414)
10 Abduction, Illegal confinement and abduction for ransom (359-361)
11 Murder, causing grievous injury/ hurt (PC 299- 338)
12 Illegal trafficking of Women and children
13 Smuggling
14 Illegal cross border transfer of local and foreign currency
15 Theft, Robbery, Dacoity, Piracy and Air Piracy (PC 378-382, 390- 402)
16 Illegal human trafficking
17 Dowry
18 Smuggling and Offence relating to Custom duties evasion
19 Offence relating to Tax
20 Infringement of Intellectual Property Right
21 Terrorism and Terrorist Financing
22 Production of goods by adulteration or violating the patent right
23 Environment Polluting
24 Sexual exploitation
25 Insider Trading and Market Manipulation regarding Stock business.
26 Organized Crime or participation in organized criminal group
27 Racketeering (Collecting money through intimidation, terrorization or threatening)
28 Any other offence as declared in gazette from time to time
(P C = The Bangladesh Penal Code 1860)

3. a) What is Placement? Ans:

• Placement involves putting cash into a bank account, which means getting it across the
counter.
• Depositing a large amount of cash in numerous small installments
• Setting up a cash business as a cover for banking criminal money
• Use Money Exchange
b) What is Layering?
• Layering separates the illicit proceeds from their source by creating complex layers of
financial transactions.
• Use the monetary instruments (P/Order) and electronic transfer.
• Examples: passes money against bogus invoices
• Raises Loan or make large Credit card payment
c) What is Integration? Ans:
• After Layering process, an integration scheme brings the laundered proceeds back into
the legitimate economy.
• Example Gaining control of a Private Company using dirty money as its capital.

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 • Invest money in Share market or real estate properties etc.

4. What are the AML and Anti-Terrorism Reporting Agencies?

1. Bank
2. Financial Institutions
3. Insurance Companies
4. Money Changer
5. Remittance Companies
6. Any other organization doing business under BB permission
7.
1. Stock Dealers and Brokers
2. Portfolio Managers and merchant Bankers
3. Security Custodian
4. Asset Management Organizations
8.
1. Non-Profit Organization
2. Non-Government Organizations
3. Co-operatives
9. Real Estate Developer
10. Traders of precious metals and Jewelers
11. Trusts and Companies providing Services
12. Legal Practitioners, Notary, other Law Practitioners and Accountants
13. Any organization included by BB from time to time under government approval

5. What is BFIU? What are its functions?

BFIU is Bangladesh Financial Intelligence Unit headed by a General Manager situated at the
Head Office of Bangladesh Bank, Dhaka. Before the BFIU Circular – 1, dated 30.01.2012 it was
called as Anti Money Laundering Department,
FIU will supply financial information to other Countries under bi-lateral agreement or
arrangements. And can also ask for such information from other countries. And increase
cooperation between AML and TF abiding Countries. (Section - 24)
6. In brief what are the Processes of combating Money Laundering?

i. Customer Acceptance Policy / Client Selection Policy

ii. Account Opening and Know Your Customer (KYC) Procedures.
iii. Risk Categorization – Based on Activity, KYC and Transaction Profile
iv. Transaction Monitoring Process and due diligence.
v. Suspicious Activity Reporting Process.
vi. Combating Terrorist Financing
vii. Self-Assessment Process.
viii. System of Independent Procedures Testing/ Audit; System check as per BB Format
ix. AML periodical Reporting and Reporting Line.
x. Preservation of Customer information (at least 5 years).
xi. Duties, responsibilities of Central Compliance Unit.
xii. Arrangement of Training for Bank Officials

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7. As per Section- 25 What are the duties and responsibilities of Reporting Agencies to combat
Money Laundering and what are the punishments for non-compliance or failure? Ans:
Duties:
a) To preserve the Complete and accurate information of Customer operating Account.
b) To Preserve Customer information of Transactions at least 5 years
c) To supply preserved data, information to Bangladesh Bank as and when demanded.
d) To report BB the suspicious transactions or its attempt by STR at its own initiative.

Punishments:
i. Financial Penalty lowest Tk 50,000 and a maximum of Tk 25.00 lac
ii. In addition to above penalty can cancel the license or permission of operation of any of its
Branch, Booth or Agents. And recommend its License Giving authority to take necessary
action against it.

8. What are the requirements of CTR? (BB AML Cir- 10/2006)

a) Monthly Reporting of CTR to BB.
b) If the daily total Cash Deposits in an Account is Taka 10 (Ten) lac and above.
c) If the daily total Cash Withdrawals in an Account is Taka 10 (Ten) lac and above.
d) Separate Reports shall be submitted for Deposits and Withdrawal.
e) The CTR shall be submitted to BB by 21st of next month.
f) The CTR will include cash Remittance or online deposit of same amount in any account.
g) Non-submission of CTR; wrong, incomplete or untrue statement is subject to punishment.
h) Previously the CTR Limit was Taka exceeding 7 (seven lac) required Reporting to BB.

9. What is goAML Software?

By this Software the CTR and STR are reported in BB web portal through online/ internet.

10. How is the Uniform Account Opening Form divided from AML point of view?
a) Personal details of the Customer & Nominee.
b) Transaction Profile (TP); prepared and signed by the Customer.
c) Know your Customer (KYC); prepared by the Bank.
d) Risk Analysis of Customer; prepared by the Bank.
e) Introduction; Introducer should be an Account Holder.

11. Who prepares KYC? How is Risk Classified? Ans: KYC means “Know Your Customer”.
KYC includes the personal details of Account holders and the detailed information, his/ their
business, nature of business and level of Risk, Source of Fund verification, overall risk assessment,
address verification source of wealth, interview with customer, KYC updating etc. KYC is
prepared by the Bank.

Risk is classified as HIGH, MEDIUM and LOW. TP is a part of KYC and signed by Customer.

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12. What are the important contents of BB BFIU Master Circular # 10 dated 28th December,
2014?

BB BFIU Master Circular # 10 dated 28th December, 2014: Regarding Instructions to be

followed by the Scheduled banks for the prevention of Money Laundering & Terrorist Financing:

Client Selection Policy:

1. No anonymous, fictitious account or only with numbers.

2. No Terrorist Account
3. NRB Account as per Foreign Exchange Regulations Act 1947.
4. Normal Customers
5. Beneficial Owner
6. High Value Customer (DD, PO, TT)- Reputational Risk
7. Customer due Diligence (CDD):
8. Enhanced Due Diligence (EDD) FOR High Risk and Non-Cooperative Jurisdictions
9. Walk-in Customer Tk 5,000 and above all information

Account Operation Policy:

1. Positive pay instruction Tk 1.00 lac+ for corporate and Tk 5.00+ lac for individual.
2. TP must be reviewed after 6 (six) months of Account Opening or when exceeded.
3. Updating KYC Low / medium risks in every two years; high risks in every one year; or when felt necessary.
4. For non face to face customer and new service or technology: Bank must have a policy guidelines
5. Politically exposed persons (PEPs)
6. Influential persons
7. High ranking executives of Int. Organizations

Customer due Diligence (CDD):

Means acting in good faith and without negligence; collecting Complete and Accurate information; checking and
identification of KYC and monitoring the Account transaction on the basis of information, data and documents
acquired from dependable, unbiased and independent source.
When CDD needed?
 When establishing relationship
 While Transactions take place.
 When suspicion arises out of existing arrangements.
 Suspects to be involved in AML & CFT activities.

 When CDD not possible: No new relation; discontinue existing relationship.

 Enhanced Due Diligence (EDD) is required for High Risk and Non-Cooperative Jurisdictions

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Duties regarding Cross Border Correspondent Banking:

1. To provide correspondent banking service; confirmation of nature of business of correspondent and top
management’s permission is required.
2. That correspondent bank is controlled and monitored by a statutory authority.
3. That Bank shall have no relationship with SHELL BANKS.
4. There will be no relationship with those Correspondent banks which have relationship with SHELL BANKS
(banks having no business or branch in its country of origin nor under Regulated Financial Group).
5. Enhanced Due Diligence shall be undertaken for those Correspondent banks operating under FATF High
Risk and non-cooperative jurisdictions.
6. In case of “Payable through accounts” the respondent bank shall complete CDD of Clients
7. These rules are also applicable for existing Correspondent banks.
8. That Correspondent bank has no relationship with organizations banned under UNSC Resolutions or Govt.

Self Assessment and Independent Audit:

Self Assessment Check list shall be sent by Branches on six monthly basis to CCU & ICCD.

Duties of ICCD:
1. Risky branches on the basis of self assessment shall be audited by ICCD immediately and give RATING.
2. Shall include AML & CFT in each audit.
3. Separate AML & CFT audit in 10% branches and MFS Agents and Cash Points in addition to normal audit.
4. Send the Audit Report to CCU.
5. AML & CFT audit in 10% of MFS Agents and Cash Points.

Wire Transfer of Money:

Complete, accurate and meaningful information of the Applicant/ Originator, Beneficiary, shall be sent to
Intermediary/ Beneficiary Bank/ Institutions shall be kept and preserved in case of Cross- Border Wire Transfer
of USD 1,000 and above; in case of Domestic Wire Transfer Tk 25,000 and above. In case of domestic wire
transfer of money below the aforesaid amounts the meaningful information of Applicant/ Originator shall be
preserved. In case of domestic wire transfer of money worth Tk 1,000 or below; the name, address and
Telephone number of Applicant and Beneficiary shall be collected.

Mobile Financial Service or Agent Banking:

 AML & CFT Risk mitigating mechanism must be setup by the Bank.
 Separate administrative structure and reporting for MFS and agent banking if it is a subsidiary.
 Screening Mechanism for appointing Agents and Cash points.
 Suspicious transactions must be reported to Central Compliance Unit by agents and cash points.
 CCU will send it by goAML web to BFIU.
 Direct reporting in case of Subsidiary.
 Leaflets etc. for customer awareness in MFS & Agent Banking awareness on prevention of financing of
terrorist organizations and financing of Proliferation of Weapons of Mass Destruction (PoWoMD).


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Appointment and Training; Preservation of Record:

 Screening mechanism of Appointment in Bank

 Training of Bank Officials
 Educating Bank’s Customers
 Justification of required doc.
 Leaflets etc. for customer awareness
 MFS & Agent Banking awareness on Financing of PoWoMD
 Leaflets, video clip etc. in public media under CSR

 Record of and Preservation of information and documents: 5 years for in all cases

Mandatory Agenda for discussion as in quarterly meeting Branches:

 KYC
 Transaction Monitoring
 Identifying STR and Reporting
 Record Keeping
 AML & CFT Training Status

13. What types of Punishments are mentioned in Anti Money Laundering Act 2012?

• In this Act Money Laundering is treated as a Crime.

• Any person has committed or tried to commit, abet, conspire the Money Laundering crime
shall be punished with a minimum imprisonment of 4 years to maximum of 12 years. For
additional Offence Fine Tk 10.00 lac or double of the asset value whichever is higher.
• In addition the property related with the crime shall be confiscated in favour of the State.
• In case of Institutions or organizations for AML Offence Fine Tk 20.00 lac or double of the
asset value whichever is higher plus its registration will be cancelled. (Sec- 4)
• Violation of Attachment Order --- maximum 3 (three) year’s imprisonment or penalty
equivalent to confiscated property. (Sec- 5)
• Unveiling Secret Information --- Min Tk 50,000 penalty or 2 (two years’ imprisonment or both
(Sec- 6)
• Obstruction or non-cooperation to investigation or non submitting statements: -- Min Tk
25,000 penalty or 1(one) year’s imprisonment or both. (Sec – 7/2)
• Providing wrong information: -- Min Tk 50,000 penalty or 3(three) year’s imprisonment or
both. S- 8

14. What is STR and what are the criteria of an STR? Ans:
The Prevention of Money Laundering Ordinance, 2012 and Anti-Terrorism Amendment Act 2013
defines STR as:

1. The Transaction which is different from usual Transactions

2. Suspicion about these Transaction arises that:
a. It is the proceeds of Crime
b. It will be used for Terrorist act, Terrorist actions or Terrorist financing
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 3. Any other Transactions or attempt of Transaction described as STR, as circulated by BB
from time to time.

Criteria of an STR:
a) Real Transaction amount widely differs from TP.
b) Any transaction of bulk amount abnormally differs from his/her known source of income.
c) Request for remittance to an account which seems not related with sender.
d) Transactions of many small amounts which in total comes to a huge amount.
e) Non-cooperation or unwillingness to provide necessary personal and financial information.
f) Avoiding the Bank Officials/ Managers.
g) Buying or selling Securities of huge amount over and above his own known sources.
h) Sudden abnormal ups and downs of cash transactions.
i) Frequent deposits of huge cash instead of instruments.
j) Asks for unnecessary huge amount of loans and repayment or adjustment huge loan all on a
sudden.
k) Opening Account with a branch away from his business point or residence.
l) Transactions are tailored to avoid AML Reporting requirements.
m) Waiver of import payment by exporter’s bank abroad.
n) Big amount of inward remittance from abroad.
o) Mis-declaration inward Foreign Remittance etc. any many more.
Any suspicion arises in your mind, do not disclose to the client; consult your GB In-charge, Manager or
Head Office. Abnormal or sudden deposit or withdrawal of huge amount does not always confirm
Money Laundering activity (Consult BB AML Circular – 2/ 2002, Appendix B).

Depending upon mere suspicion, even the Court of Law cannot convict a person; so you must be very
careful about it and the Customer shall never be harassed in any case. You must always be careful about
the Client Service. Don’t go for any unnecessary argument with Clients regarding ML issues. Try to be
tactful and any confusion arises please consult your GB In-charge or Branch Manager.

15. How many AML Statements and Returns are submitted by the Branches? Ans: Four types of
Returns are submitted ------- a) Monthly Return: CTR and b) Quarterly Returns: i) STR, ii)
Hundi and iii) Self Assessment.
16. What is the present Law prevailing for Prevention of Money Laundering? Ans: Prevention of
Money Laundering Act, 2012 (Ordinance no. 02, 2012 dated 16.01.2012).
17. What is the history of AML enactment? First AML Act, 2002 w.e.f. 30.04.2002 with 21
Sections in the Act; Then AML Ordinance, 2008 was effective from 15.04.2008; Subsequently it
was passed by the Parliament as Money Laundering Prevention Act, 2009 effective from the same
date with no change; with 31 Sections in the Act. Then Prevention of Money Laundering Act,
2012 with effect from January 16`, 2012.

18. Is there any transaction reported from your Branch as STR? Ans: If you are Branch Manager or
GB In-charge you will have to give the answer; if not your answer will be “it is not known to me,
the Manager or GB In-charge is aware of that”.

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19. How many meeting were held say, in last six months? Ans: Your reply will include the exact
number of meetings held; you must show the proceeding and minutes of the meetings.
20. Have you taken any Training on AML? You will have to give answer and mention the month and
year you took training. You have to show the certificate or Office Order if asked for. You will
submit a copy of your AML Training Certificate with the Branch for ready reference.

21. Who may visit your Branch and ask on AML issues and circulars? Ans: OBL AML Central
Compliance Unit Executives, OBL Internal Audit Team and BB FIU Inspection Team. All these
visits will be surprise visit.

22. If the actual transaction amount exceeds the TP amount, what will the Branch do? Ans: The
Branch will firstly try to find whether there is any chance of being a Suspicious Transaction, if not
the existing TP shall be updated immediately.

23. What are CAMLCO and BAMLCO? Ans: CAMLCO is Chief Anti-Money Laundering
Compliance Officer; BAMLCO is Branch Anti-Money Laundering Compliance Officer.

24. What is Egmont Group of FIUs?

Recognizing the benefits inherent in the development of a network, in 1995 a group of Financial
Intelligence Units (FIUs) met at the Egmont Arenberg Palace in Brussels and decided to establish
an informal group whose goal would be to facilitate international cooperation; known as the
Egmont Group, these FIUs meet regularly to find ways to cooperate, especially in the areas of
information exchange, training and the sharing of expertise.
The Egmont Group Secretariat was established in July 2007 and is based in Toronto, Canada. It
provides administrative and other support to the overall activities of the HoFIUs, the Egmont
Committee and the Working Groups.
25. Historical perspectives of Money Laundering and Terrorist Financing:

• 1920s : Al Capone American gangster used Laundry Firms

• 1980s : American Mafia used Pizza / Jeweler Stores
• 1990s : Corsican Gangsters used Plastic Surgery Clinics
• 2000 : Politically Exposed Persons
• 2001 : Terrorist Financing

26. What is Financial Action Task Force (FATF)? How Bangladesh is related with it?

The main international agreements addressing Money Laundering are the United Nations Vienna
Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (the Vienna
Convention) 1988 and the 1990 Council of Europe Convention on Laundering, Search, Seizure
and Confiscation of the Proceeds of Crime; which became effective in November 1990.
(Psychotropic: Describes drugs that are capable of affecting the mind, e.g. those used to treat
psychiatric disorders.)

35
 In response to mounting concern over money laundering, an international body was established to
oversee the implementation of the principles of the Vienna Convention. This organization is
known as the Financial Action Task Force (FATF) established by the G-7 Summit that was
held in Paris in 1989 and is based in Paris.

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the
development and promotion of policies, both at national and international levels, to combat money
laundering and terrorist financing.

The FATF Blacklist is the common shorthand description for the Financial Action Task Force
list of "Non-Cooperative Countries or Territories" (NCCTs); that is, countries which it perceives to
be non-cooperative in the global fight against money laundering and terrorist financing.
It established a series of Recommendations in 1990, revised in 1996 and in 2003 to ensure that
they remain up to date.
The revised 40 Recommendations apply not only to money laundering but also to terrorist
financing, and when combined with the 9 Special Recommendations on Terrorist
Financing provide an enhanced, comprehensive and consistent framework of measures for
combating money laundering and terrorist financing.

The 1996 40 Recommendations have been endorsed by more than 130 countries and are the
international anti-money laundering standard.
It currently has 36 members: 34 countries and governments and two international organizations
and more than 20 Observers including IMF and World Bank; five FATF-style regional bodies and
more than 15 other international organizations or bodies.

In December 1988, the G-10's Basel Committee on Banking Supervision issued a "Statement of
principles" with which the international banks of member states are expected to comply. These
principles cover identifying customers, avoiding suspicious transactions, and co-operating with
law enforcement agencies. In issuing these principles, the committee noted the risk to public
confidence in banks, and thus to their stability, that can arise if they inadvertently become
associated with money laundering.

27. What is The Asia/Pacific Group on Money Laundering (APG)?

The Asia/Pacific Group on Money Laundering (APG or APGML) is an international organization

(regionally focused) consisting of 41 members and a number of international and regional observers
including the United Nations, IMF, FATF, Asian Development Bank and World Bank. Bangladesh is a
Member of APGML.

28. What are the focal points of AML all over the world?
a) Trafficking of Narcotic Drugs and Psychotropic Substances
b) Illegal arms trade
c) Smuggling & Hundi Business
d) Terrorism and Terrorist Financing
e)

36
29. How AML and CFT have become more important to the Banks?

Bangladesh Bank has identified six Core Risk Areas of Banking and Money Laundering is one of
them. Not only that, while rating CAMELS of the Banks 20% of the marks are allocated for AML
Performance of the Bank as a whole. The six Core Risks Areas are:

1. Credit Risks
2. Asset and Liability/Balance Sheet Risks
3. Foreign Exchange Risks
4. Internal Control and Compliance Risks
5. Money Laundering Risks
6. Information Technology Risk

30. What are the AML and Anti-Terrorism Acts in U.S.A.?

• The Bank Secrecy Act 1970 requires US Banks for CTR of US $10,000 and above.
• The Money Laundering Control Act, 1986
• The USA PATRIOT Act of 2001
• Terrorism Act of 2001
31. When the Anti-Terrorist Act was enacted? What is our duty over there?
Ans: The Anti-Terrorist Ordinance was effective from 11.06.2008. The same was passed by the
Parliament and became Anti-Terrorist Act, 2009 effective from 11.06.2008. The Anti-Terrorist
(Amendment) Act, 2012 was enacted on February 20, 2012. The latest Anti-Terrorism
(Amendment) Act, 2013 was enacted on June 11, 2013.
As per the Act we shall not allow any terrorist to open and operate Accounts with us and shall not
allow them remittance and online facilities or shall not extend any funding to them or their aids.
32. How Terrorism is defined in Anti-Terrorism(Amendment) Act, 2013?
• Any one who creates panic among general people to endanger the sobreignty, integrity,
security and solidarity of Bangladesh and tries to destabilize the Government
• And kills, act for grievous hurt, confinement, abduction, or causing damage to lives and
properties of individuals or State or abetment of such activities.
• Instigate any person or try to instigate for killing, act for grievous hurt, confinement, abduction
or causing damage to lives and properties of individuals or State.
• Or possesses or uses explosives, flammable articles, fire arms or any destructive chemical all
these activities;
• Any person tries to endanger the security of other countries from Bangladesh and commits any
crime abets or instigate any crime or any financial support or indulge in any crime or helps abet
or instigate;
• Or any person knowingly acquires or enjoy any property out of or terrorism;
• Or any foreigner does the same offence within Bangladesh; for the above ill motive will be
treated as Terrorist Activities (Sec - 5).

33. How the Bangladesh Bank will be active to combat Terrorism?

BB shall take all necessary actions to combat and identify the financial transactions and can
apply the power to:
– a) Can ask for Suspicious Transaction report from Reporting Agencies
37
 – b) Hand over the report to the local or foreign Law Enforcement Agencies
– c) Keep record and statistics
– d) Preserve and Create database of Suspicious Transaction
– d) Analyze the reports
– e) Can stop A/c for 30 days and can extend each 30 days upto 6 months
– f) Observe and inspect the Bank’s functions
– g) Directs banks to take preventive measures
– h) Inspects the suspected Banks
– i) Arrange Training for Bank Officials ( Sec - 15)

Section 15. Powers of Bangladesh Bank.:

• (1) Bangladesh Bank may take necessary steps to prevent and identify any transaction carried
out by any reporting agency with intent to commit an offence under this Act and for this purpose
it shall have the following powers and authority,
• namely:-
• (a) to call for a report relating to any suspicious transaction from any reporting agency, analyze
or review the same and to collect additional information
• relating thereto for the purpose of analyzing or reviewing the same and maintain record or
database of them and, as the case may be, provide with the said information or report to the
police or other concerned law enforcement agencies for taking necessary actions;
• (b) if there is reasonable ground to suspect that a transaction is connected to terrorist activities, to
issue a written order to the respective reporting agency to suspend or freeze transactions of that
relevant account for a period not exceeding 30 (thirty) days and, if it appears necessary to reveal
correct information relating to transactions of the said account, such suspension or freezing order
may be extended for an additional term not exceeding 6 (six) months by 30 (thirty) days at a
time;
• (c) to monitor and supervise the activities of the reporting agencies;
• (d) to give directions to the reporting agencies to take preventive steps to prevent financing of
terrorist activities and proliferation of weapons of mass destructions (WMD);
• (e) to monitor the compliance of the reporting agencies and to carry out on-site inspection of the
reporting agencies for carrying out any purpose of this Act; and
• (f) to provide training to the officers and employees of the reporting agencies for the purpose of
identification of suspicious transactions and prevention of financing of terrorist activities.
• (2) Bangladesh Bank, on identification of a reporting agency or any of its customers as being
involved in a suspicious transaction connected to financing of terrorist activities, shall inform the
same to the police or the appropriate law enforcement agency and provide all necessary
cooperation to facilitate their inquiries and investigations into the matter.
• (3) If the offence is committed in another country or the trial of an offence is pending in another
country, Bangladesh Bank shall take steps to seize the accounts of any person or entity upon
request of the foreign state or pursuant to any international, regional or bilateral agreement,
United Nations conventions ratified by the Government of Bangladesh or respective resolutions
adopted by the United Nations Security Council.
• (4) The fund seized under sub-section (3) shall be subject to disposal by the concerned court or
pursuant to the concerned agreements, conventions or resolutions adopted by the United Nations
Security Council.

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 • (5) The power and responsibilities of Bangladesh Bank under the provisions of this Act shall be
exercised by Bangladesh Financial Intelligence Unit (BFIU), and if Bangladesh Financial
Intelligence Unit requests to provide with any information under this Act, all the governmental,
semi-governmental or autonomous bodies, or any other relevant institutions or organizations
shall, on such request or, as the case may be, spontaneously provide it with such information.
• (6) Bangladesh Financial Intelligence Unit shall, on request or, as the cases may be,
spontaneously provide the financial intelligence units of other countries or any other similar
foreign counterparts with any information relating to terrorist activities or financing of terrorist
activities.
• (7) For the interest of investigation relating to financing of terrorist activities, the law
enforcement agencies shall have the right to access any document or file of any bank under the
following conditions, namely:-
• (a) according to an order passed by a competent court or special tribunal; or
• (b) with the approval of the Bangladesh Bank.
• (8) If any reporting agency fails to comply with the directions issued by Bangladesh Bank under
this section or knowingly provides any wrong or false information or statement, the said
reporting agency shall be liable to pay a fine, determined and directed by Bangladesh Bank, not
exceeding taka 25 (twenty five) lac, and Bangladesh Bank may suspend the registration or
license with intent to stop operation of the said agency or any of its branches, service centers,
booths or agents within Bangladesh or, as the case may be, shall inform the registering or
licensing authority about the subject matter to take appropriate action against the agency.
• (9) If any reporting agency fails to pay or does not pay any fine imposed by Bangladesh Bank
according to sub-section (8), Bangladesh Bank may recover the amount from the reporting
agency by debiting its accounts maintained in any other bank or financial institution or in
Bangladesh Bank and in case of any unrealized or unpaid amount, Bangladesh Bank may, if
necessary, apply before the concerned court for recovery.

34. What are the duties and responsibilities of Reporting Agencies to combat Terrorist Financing and
what are the punishments for non-compliance or failure? Ans:
Section 16: Duties of reporting agency.-

(1) Every reporting agency shall take necessary measures, with appropriate caution and responsibility, to
prevent and identify financial transactions through it which is connected to any offence under this Act
and if any suspicious transaction is identified, the agency shall spontaneously report it to Bangladesh
Bank without any delay.
(2) The Board of Directors, or in the absence of the Board of Directors, the Chief Executive, by
whatever name called, of each reporting Organization shall approve and issue directions regarding the
duties of its officers, and shall ascertain whether the directions issued by Bangladesh Bank under section
15, which are applicable to the reporting agency, have been complied with or not.

(3) If any reporting agency fails to comply with the provision under sub-section (1), the said reporting
agency shall be liable to pay a fine, determined and directed by Bangladesh Bank, not exceeding taka 25
(twenty five) lac and Bangladesh Bank may suspend the registration or license with intent to stop
operation of the said agency or any of its branches, service centers, booths or agents within Bangladesh
or, as the case may be, shall inform the registering or licensing authority about the subject matter to take
appropriate action against the agency.

39
(4) If the Board of Directors, or in the absence of the Board of Directors, the Chief Executive Officer, by
whatever name called, of any reporting organization fails to comply with the provision of sub-section
(2), the Chairman of the Board of Directors, or the Chief Executive Officer, as the case may be, shall be
liable to pay a fine, determined and directed by Bangladesh Bank, not exceeding taka 25 (twenty five)
lac, and Bangladesh Bank may remove the said person from his office or, as the case may be, shall
inform the competent authority about the subject matter to take appropriate action against the person.

35. What types of Punishments are mentioned in Anti- Terrorism (Amendment) Act 2013?
• Punishment against Act of Terrorism: Death Sentence, Life imprisonment, imprisonment upto
20 years or minimum 4 years + Fine.
• Terrorist Financing (Sec – 7): a) Knowingly Provides or intends to provide Money, Material
Support or supplying any property b) Knowingly accepts or intends to accept Money, Material
Support or any property which was used or to used for terrorist activities. c) Knowingly arranges
money, service, material support or other properties. d) Knowingly instigate to accept Money,
Material Support or any property which was used or to used for terrorist activities.
• Punishment: imprisonment upto 20 years or minimum 4 years + Fine Tk 10.00 lac or double of
the asset value whichever is higher. For additional Offence Fine Tk 50.00 lac or triple of the asset
value whichever is higher.
• Chairman, Managing Director CEO of any organization: imprisonment upto 20 years or
minimum 4 years. For additional Offence Fine Tk 20.00 lac or double of the asset value
whichever is higher; if they cannot prove that they were not aware of the crime or tries his best to
prevent those.
• Failure to comply BB instruction Fine upto Tk 25.00 Lac with a minimum of Taka 5.00 lac and
BB can stop can suspend the activities of the Organization, its branch, booth or agent.
• If any negligence of implementing and activating the Anti Terrorism Actions is proved,
appropriate administrative action will be taken against that / those Public Servants as per Service
Rule.
• The Court can confiscate the properties in question in favour of the State.
36. What are the contents of AML Circular no. 25 dated 3rd May 2010?
Ans: Remittance in favour of any electronic media for US$ 50,000 and above or any kind of
Suspicious Transactions: Any incoming remittance in favour of any Electronic Media for US $
50,000 and above or any kind of Suspicious Transactions related to the Inward Remittance in
favor of any Electronic Media irrespective of any amount shall be reported to AML Department,
BB and the amount thereon shall not be released without prior permission of AML Department,
Bangladesh Bank.
These are the most common facts, questions to be faced by our officers. Many more questions may
arise; but this is just an indicative list. You are advised not to be confined within this write-up but also
go through the Money Laundering Prevention Act, Anti Terrorism Act, related papers, documents, BFIU
circulars; attend the periodical meetings in branches; bring awareness among yourselves and try to be
sincere in the AML and CFT Training held from time to time.

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