146
LEGISLATION
the requirement, existing since 1960 in the case of banks licensed since then, that each bank should have a minimum capital of $5 million is extended to all banks and there is added to this a requirement that each bank should build up open reserves of an equal amount to provide a 'cushion' to protect the bank's customers against possible losses. The ordinance also contains a series of restrictions on the activities of banks designed to avoid the risks inherent in a bank becoming over-committed to any one customer, being 'milked' by its proprietors, directors or staff, undertaking trading risks on its own account or tying up too great a proportion of its fund in illiquid and speculative transactions. Other features are detailed provisions designed to ensure that sufficient liquid assets are always available to banks to meet day-to-day variations in net receipts and withdrawals, and provision is also made to secure the proper auditing of bankers' books and the proper publica- tion of annual balance sheets. Full reporting, monthly and quarterly, to the Financial Secretary is also required in order to make it possible for the Banking Commissioner, appointed pursuant to the ordinance, to discharge his supervisory duties and, where necessary, to conduct detailed inspection. Finally, provision is made for the appointment by the Financial Secretary of an adviser to a bank or, if need be, for the Banking Commissioner himself to assume control of a bank in the event of inspection revealing an unsatisfactory state of affairs. A banking licence is, under the ordinance, necessary before a company can carry on banking business, and the ultimate sanction against a bank would, of course, be the withdrawal of its licence. Further, in certain circumstances a bank may be com- pulsorily wound up. There is also provision that, in the event of various contraventions of the ordinance, the directors and managers of the offending bank are guilty of offences instead of the bank itself.
The School Medical Service Board Incorporation Ordinance, 1964, makes provision for the incorporation of a statutory Board to operate a scheme to provide inexpensive medical treatment for the pupils of schools in the Colony.
The Larceny (Amendment) Ordinance, 1964, amends the Larceny Ordinance so as to reduce the number of technical defences available to persons accused of certain types of frauds. In particular the offences of obtaining goods by false pretences and of obtaining