Section 42
Capital Fund
(1) Every licensed institution shall maintain a capital fund in the ratio prescribed by the Rastra Bank on the basis of its total assets or total risk-weighted assets.
(2) If any bank or financial institution fails to maintain the capital fund as referred to in Sub-section (1), the Board shall give information thereof to the Rastra Bank within thirty five days. The information so given shall also be accompanied by, inter alia, the reasons for the failure to maintain the capital fund and the plan or
program prepared by the Board to increase the capital fund and restore it to its previous condition.
(3) On receipt of the information referred to in Sub-section
(2), if the Rastra Bank considers the plan or program submitted by the Board to be reasonable, it may give a directive to the concerned bank or financial institution to implement such plan or program; and if any amendment or alteration is to be made in the proposed plan or program, it may give a directive, accompanied by the reasons for such amendment or alteration, to the concerned bank or financial institution to amend or alter such plan or program and implement the same.
(4) If any bank or financial institution fails to meet the obligation referred to in this Section or if it does not appear that it can do so immediately, the Rastra Bank may take action referred to in Section 37 against such bank or financial institution.
(5) Notwithstanding anything contained elsewhere in this Section, if it is found that the concerned bank or financial institution has failed to maintain its capital fund as provided for in Sub-section (1) by the reason of the failure of the Board of Directors to comply with the directives given by the Rastra Bank from time to time or by the reason of malice recklessness or mala fide intention of the director or chief executive, the Rastra Bank may punish such director or chief executive with a fine equal to the amount involved; and if such act of the director or chief executive is found to have caused any loss or damage as a result of the failure to maintain the capital fund, the Rastra Bank, the concerned bank or financial institution or any shareholder holding up to five per cent of the paid-up capital of such bank or
financial institution may either individually or collectively file a petition with the court against such director or chief executive for the recovery of that amount, in accordance with laws in force.
(2) If any bank or financial institution fails to maintain the capital fund as referred to in Sub-section (1), the Board shall give information thereof to the Rastra Bank within thirty five days. The information so given shall also be accompanied by, inter alia, the reasons for the failure to maintain the capital fund and the plan or
program prepared by the Board to increase the capital fund and restore it to its previous condition.
(3) On receipt of the information referred to in Sub-section
(2), if the Rastra Bank considers the plan or program submitted by the Board to be reasonable, it may give a directive to the concerned bank or financial institution to implement such plan or program; and if any amendment or alteration is to be made in the proposed plan or program, it may give a directive, accompanied by the reasons for such amendment or alteration, to the concerned bank or financial institution to amend or alter such plan or program and implement the same.
(4) If any bank or financial institution fails to meet the obligation referred to in this Section or if it does not appear that it can do so immediately, the Rastra Bank may take action referred to in Section 37 against such bank or financial institution.
(5) Notwithstanding anything contained elsewhere in this Section, if it is found that the concerned bank or financial institution has failed to maintain its capital fund as provided for in Sub-section (1) by the reason of the failure of the Board of Directors to comply with the directives given by the Rastra Bank from time to time or by the reason of malice recklessness or mala fide intention of the director or chief executive, the Rastra Bank may punish such director or chief executive with a fine equal to the amount involved; and if such act of the director or chief executive is found to have caused any loss or damage as a result of the failure to maintain the capital fund, the Rastra Bank, the concerned bank or financial institution or any shareholder holding up to five per cent of the paid-up capital of such bank or
financial institution may either individually or collectively file a petition with the court against such director or chief executive for the recovery of that amount, in accordance with laws in force.