Section 12: Prohibition on transaction of Securities

1) The Director, Chief Executive, Auditor, Company Secretary of the bank or financial institution or the person directly involved in the management and account of a bank or financial institution shall not buy or sell, mortgage or cause to be mortgaged, transfer or transact or give or accept as a donation the securities of the concerned bank or financial institution or of its subsidiary company in his/her name or in name of member of his/her family or a firm, company or institution under the control of such person or to any other person until he/she is in such position or until one year from the date of retirement from such position.

Provided that this Sub-Section is not deemed to have hindered to buy and sell securities among Directors to Directors or Directors to Promoters with the approval of the Rastra Bank while issuing bonus shares, rights shares or the shares allotted for employee or issuing new shares, or while implementing a directive of the Rastra Bank or while selling entire share having in any bank or financial institution under own ownership by any Director or any corporate body having power to appoint Director or while merging or amalgamating bank or financial institutions in each other according to provisions made in Chapter-10 or while acquiring all assets or liabilities of one bank or financial institution by another bank or financial institution or while carrying out purchase or sale of securities among promoter directors or directors to directors with the approval of the Rastra Bank in case of emergence of any hurdle in operation of the bank or financial institution or while carrying out purchase or sale or transfer of shares during the process of reformative or settlement process of a problematic bank.

2) In case anyone commits any act in contrary with sub-section (1), the concerned bank or financial institution shall have to forfeit such securities and sell them according to the process as prescribed by the Rastra Bank.