suggestion that the bank was kept open on Saturday for the express reason of clearing cheques payable to the Government is completely untrue.
23. Pursuant to my instruction that the overall size of the
loan book should not be increased, the management of the bank issued a memorandum to branch managers advising that temporary overdrafts and excesses over overdraft limits should not be permitted. A copy of this memorandum is a: Enclosure IV. In some cases, this seems to have resulted in cheques drawn on BCCHK accounts being returned unpaid on Saturday where there were insufficient funds in the accounts, or where the cheques had been drawn against "uncleared effects", i.e. other cheques deposited in the accounts which had not themselves cleared. In one such example, a branch manager allowed two small cheques of $707 and $582 in favour of the Government drawn against uncleared effects to be paid. But this was done solely at the discretion of the branch manager concerned.
It was not, as I have said, the result of any instruction from my office.
I saw the restrictions described in paragraph 21 as a Cemporary defensive holding measure. It was necessary both immediately and for the longer-term to ensure that the Government of Abu Dhabi still stood behind the bank. Although it had only recently provided a Letter of Comfort, the situation of the BCC Group as a whole had clearly changed and I wished to have confirmation that the Government of Abu Dhabi continued to support 3CCHK and to try to have that support strengthened. representative had hoped to have been able to discuss this with the shareholders' representative in Luxembourg on Friday, 5 July, but this did not prove possible.
It was arranged therefore that he would fly o Abu Dhabi to hold discussions on support for BCCHK on Sunday, 7 July. To have closed the bank on Saturday would have damaged any prospect of success in these talks.
My
The pattern of with rawals from BCCHK on Saturday
25. CCHK managed to trade relatively normally on Saturday,
1:hough some larger than normal withdrawals were made from some branches. The overall amount withdrawn in various forms was relatively high for a Saturday. This Movement needs, however, to be viewed in the light of the general decline in BCCHK's deposit base during 3.991. Some deposits of cash and cheques were received by the bank.
Bi
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