CHAPTER 363
DEVELOPMENT BANK OF ZAMBIA ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

PART II
ESTABLISHMENT AND ADMINISTRATION OF THE BANK

   3.   Establishment

   4.   Board of Directors

   4A.   Repealed

   5.   Quorum and meetings of Board

   6.   Establishment of committees

   7.   Employment of Managing Director

   8.   Employment of staff

PART III
SHARE CAPITAL AND OTHER ASSETS

   9.   Authorised capital and its division of shares

   10.   Subscription and allotment of shares

   10A.   Consent of Minister required in certain cases

   11.   Additional shares

   11A.   Transfer and vesting of non-performing portfolio of Bank

   11B.   Conversion of certain financial liabilities into debentures

PART IV
THE BUSINESS, PURPOSES AND FUNDS OF THE BANK

   12.   Business of Bank

   13.   Repealed

   14.   Funds of Bank

   15.   Application of funds

   16.   Financing of projects by Bank

   17.   Limits on financing by Bank

   17A.   Repealed

   18.   Repealed

   19.   Safeguards for investment

   20.   Investment of funds

   21.   Reserve funds and distribution of income

PART V
ACCOUNTS AND AUDIT

   22.   Financial year

   23.   Accounts and audit

   24.   Annual report

PART VA
INSOLVENCY AND DISSOLUTION

   24A.    Insolvency

   24B.    Effect of dissolution of Bank

PART VI
MISCELLANEOUS

   25.   Rules

AN ACT

to provide for the establishment, constitution, duties and powers of a Development Bank of Zambia to assist in the economic development of Zambia and to provide for matters incidental to or connected with the foregoing.

[6th July 1973]

Act 35 of 1972,

Act 6 of 1975,

Act 28 of 1975,

Act 6 of 1979,

Act 29 of 1982,

Act 11 of 2001,

Act 24 of 2005.

PART I
PRELIMINARY

1. Short title

This Act may be cited as the Development Bank of Zambia Act.

2. Interpretation

In this Act, unless the context otherwise requires—

“Bank” means the Development Bank of Zambia established under section 3;

“Bank of Zambia” means the Bank of Zambia established under the Bank of Zambia Act;

[Ins by s 2 of Act 24 of 2005.]

“Board” means the Board of Directors of the Bank appointed under section 4;

“Class A Directors” means the members of the Board appointed by the Minister under sub-section (3) of section 4;

“Class B Directors” means the members of the Board appointed by the holders of Class B shares under sub-section (3) of section 4;

“Class A shares” means the shares allotted under paragraph (a) of sub-section (1) of section 10;

“Class B shares” means the shares allotted under paragraph (b) of sub-section (1) of section 10;

“Class C shares” means the Class C shares created under paragraph (a) of sub-section (9) and allotted under section 11;

“commitment fee” means a fee imposed on the allocated but the un with drawn portion of the principal of any loan;

…

[“economic development” rep by s 2(a) of Act 11 of 2001.]

“employee” means any person in the service of the Bank or engaged in connection with any business of the Bank;

“financial business” has the meaning assigned to it by the Banking and Financial Services Act;

[Ins by s 2 of Act 24 of 2005.]

…

[“long and medium term finance” rep by s 2(a) of Act 11 of 2001.]

“member” means the Chairperson or any other member of the Board.

[Ins by s 2(b) of Act 11 of 2001.]

…

[“recipient” rep by s 2(a) of Act 11 of 2001.]

“shareholders” means the persons who have subscribed to share capital of the Bank, and have paid the subscription;

“special funds” means the funds administered by the Bank under paragraph (d) of section 12.

[S 2 am by Act 6 of 1979.]

PART II
ESTABLISHMENT AND ADMINISTRATION OF THE BANK

3. Establishment

   (1) There is hereby established the Development Bank of Zambia which shall by that name be a body corporate with perpetual succession and a common seal and shall be capable of suing and being sued and, subject to the provisions of this Act, of doing or performing all such acts or things as a body corporate may by law do or perform.

[S 3 renumbered as 3(1) by s 3(a) of Act 24 of 2005.]

   (2) The Bank is a financial business for purposes of the Banking and Financial Services Act.

[S 3(2) ins by s 3(b) of Act 24 of 2005.]

   (3) Notwithstanding sub-section (2), the Bank shall be deemed to be a financial institution for purposes of Part 2 of Chapter VI and Chapter VII of the Banking and Financial Services Act.

[S 3(3) ins by s 3(b) of Act 24 of 2005.]

   (4) After the date of the coming into force of this Act, the Bank of Zambia may prescribe such transition periods as are appropriate to permit the Bank to achieve compliance with the licensing and other requirements of the Banking and Financial Services Act.

[S 3(4) ins by s 3(b) of Act 24 of 2005.]

4. Board of Directors

   (1) There shall be a Board of Directors which shall, subject to the other provisions of this Act, be responsible for the policy and general administration of the affairs and business of the Bank.

   (2) The Board shall consist of a Chairman and nine other members, shall, subject to the other provisions of this Act, hold office for a period of three years and shall be eligible for reappointment.

   (3) The Chairperson and three other members shall be appointed by the Minister and the remaining six members shall be appointed by the holders of Class B shares:

Provided that in the case of an appointment by the holders of class B shares, a true copy thereof shall be forwarded to the Minister and to the Bank

[S 4(3) subs by s 3(a) of Act 11 of 2001.]

   (4) The Minister may at any time revoke the appointment of any Class A director, and the holders of Class B shares may at any time revoke the appointment of any Class B director.

   (5) A member appointed by the Minister or a member appointed by the holders of Class B shares may, at any time, resign from office by giving written notice to the Minister or to the Chairperson:

Provided that in the case of resignation by a member appointed by the holders of class B shares a true copy of the resignation letter shall be forwarded to the Minister and to the Bank.

[S 4(5) subs by s 3(b) of Act 11 of 2001.]

   (6) No person shall be appointed to or continue to hold office on the Board while he is—

      (a)   an undischarged bankrupt;

      (b)   of unsound mind;

      (c)   incapacitated through illness or otherwise from performing his duties;

      (d)   serving a sentence of imprisonment upon conviction for an offence involving fraud or dishonesty; or

      (e)   declared persona non grata by Government.

[S 4(6) subs by s 4(a) of Act 24 of 2005.]

   (7) A member of the Board shall cease to be a member if he is absent from three consecutive meetings of the Board without leave of the Chairman.

   (8) The Minister shall—

      (a)   in the case of a Class A director, within three weeks of making the appointment under sub-section (3);

      (b)   in the case of a Class B director, within three weeks after receiving a true copy of the written appointment under sub-section (3);

      (c)   in the case of a Class A director, within three weeks of revoking the appointment under sub-section (4);

      (d)   in the case of a Class B director, within three weeks after receiving a true copy of the written revocation under sub-section (4);

      (e)   in the case of a member of the Board resigning under sub-section (5), within three weeks after receiving a true copy of the notice;

      (f)   in the case of a member of the Board being disqualified from continuing to hold office on the Board under sub-section (6) or ceasing to hold office under sub-section (7), within three weeks of the Minister becoming aware of the disqualification or cessation, as the case may be;

notify in the Gazette the appointment, revocation, resignation, disqualification or cessation, as the case may be.

   (9) If at any meeting of the Board the Chairperson is absent, the members present shall elect one of their number from class A directors to chair the meeting.

[S 4(9) subs by s 3(c) of Act 11 of 2001.]

   (10) A member of the Board shall be paid from the funds of the Bank such remuneration or allowances as the Board may determine.

[S 4(10) subs by s 3(d) of Act 11 of 2001.]

   (11)—

      (a)   At the first meeting of the Board after a person is appointed its member, he shall declare to the Board the terms and conditions of all outstanding finance and all other assistance being provided by the Bank to him or to any of his associates.

      (b)   In addition to the requirements of the Banking and Finance Services Act whenever the Board is considering an application by a member or any associate of a member for finance or any other assistance from the Bank, or for variation of the terms or conditions of any outstanding finance or other assistance, such member shall declare his interest to the Board and shall refrain from taking part in any discussion of or vote upon such application.

[S 411(b) am by s 3(e) of Act 11 of 2001; s 4(b) of Act 24 of 2005.]

      (c)   For the purposes of this sub-section, a person is an associate of a member if that person is—

      (i)   related to that member within the third degree of affinity or consanguinity;

      (ii)   a partner, employee or employer of that member; or

      (iii)   a debtor, mortgagor, creditor or mortgagee of, or otherwise has direct, material or commercial dealings with, that member or anybody of persons, whether corporate or unincorporate, of which that member is a director or in which that member holds any office or position other than that of an auditor or in which that member holds a controlling interest.

   (12)1The Minister may, by writing, give to the Board such general directions concerning the policy to be followed by the Bank in the performance of its functions under this Act as he may deem necessary and appropriate in the public interest:

Provided that such resignation shall not become effective until it is accepted by the Minister.

[S 4 am by Act 6 of 1975.]