Section 7: Functions not to be Carried out by the Bank

1) Except otherwise provided for in this Act, the Bank shall not carry out the following functions:

(a) Providing any loan, accepting any deposit or making any financial gift,

(b) Purchasing shares of any commercial bank, financial institution, public corporation or a company or acquiring any proprietary right in any financial, commercial, agricultural, industrial or other institution,

(c) Carrying out any trade, and

(d) Acquiring the right over movable and immovable property by way of purchase, lease or in any manner whatsoever.

Provided that the Bank may acquire such property as required for carrying out its function or for achieving its objectives.

2) Notwithstanding anything contained in sub-section (1), the Bank may carry out the following functions:-

(a) To provide a loan to and invest in the shares of the institutions which carry out the functions helpful in carrying out the function of the Bank or in attaining its objectives, not exceeding ten percent of the total capital of such institutions.

Explanation: For the purpose of this Clause, “institutions which carry out the functions which help carry out the functions of the Bank or in attaining its objectives” means any institutions, companies which are exclusively engaged in evaluating, managing, protecting the security, restructuring and transferring the securities of commercial banks or of financial institutions, carry out the function of credit rating, exchange of credit information, process and transmit data, print financial instruments, clearing payments, liquidate property, produce bank notes and coins and act as trustee and any other institution or companies established for carrying out similar function and prescribed by the Bank.

(b) To provide loans to its own employees.