33
Banks and 31% with local Banks; and of current account 78%
was with foreign Banks and 22% with local Banks. It is
relevant to remark that only 2.6% of the total fixed
deposits and 2% of the total amount on current account was
held by the 36 commercial Banks whose paid-up capital is
less than £P.10,000.
12. The possibility of danger from the operation of
the small Banks is not therefore a matter of immediate
concern, but it is necessary to keep a vigilant eye on
future developments. In the case of co-operative Banks
the direct control of the Registrar of Co-operative
Societies has a salutary effect, but in the case of
commercial Banks the absence of such control, the inadequate
capital resources and the meagre banking experience of
promoters in the majority of cases constitute, in our
opinion, a grave risk.
13.
PART ONE OF TERMS OF REFERENCE.
Turning now to our terms of reference seriatim
we submit the following report:-
(a) To consider the practicability of and to make
recommendations regarding fixing a minimum capital to be
paid up within a year from the date of registration or to
recommend some other suitable means of establishing the
financial bona fides of a Bank.
14. As regards the question of establishing the
financial bona fides of a Bank before it is allowed to
undertake banking business, it was agreed that the
provision of an adequate amount of paid-up capital was the
best evidence that a Bank had people of substance and
standing interested in it. While we are generally agreed
that the minimum paid-up capital should be substantially in
the region of £P.50,000, it was thought that as there had
been