| Wasn’t it the famous British humorist Edward Lear who asked: |
| Who, where, why or what |
| is the Akhond of Swat? |
| We all know who the Akhond or the Wali of Swat is, or was, until he surrendered both his sons - Miangul Aurangzeb and Jehanzeb - as sons-in-law to President Ayub Khan, and his small kingdom for absorption into One Unit. |
| A similar sort of question could be asked of the banking fraternity. Who or more appropriately what is a bank? That is the question I shall attempt to answer during the course of this paper, and if at the end of it, I am no closer to it than Edward Lear was from the distant principality of Swat, it may be perhaps because such an elusive definition is best described in the language of limericks, not law. The first statutory definition of a Banking Company was contained in the Banking Companies Ordinance 1947, which read, and I will repeat it for the benefit of those of you who were not even born then: `A banking company has the meaning assigned to it in Section 277F of the Companies Act 1913.’ The purpose of the BCO of 1947, though, was less to crystallise a definition of a banking company, and more in those early days to `providing a moratorium to the banking companies which had temporarily been incapacitated from meeting their liabilities.’ |
Paper presented at the ISG Training Course conducted by the Directorate General Income Tax (Training & Research), Lahore, 14 July 1998. Published in BUSINESS RECORDER 18-20th August 1998, and reprinted in THE BARK OF A PEN (2001). |
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