37
19. We consider that the foregoing recommendations
for establishing the "financial bona fides of Banks" and
Bankers should be reinforced by the following proposals
regarding:-
(1)
Appointment of Directors;
(11)
Audit of Accounts;
20.
(iii) Publication of Returns.
With regard to (i), in the knowledge that in
some cases individuals of doubtful commercial reputation
are acting as Directors of Banks, we recommend that
(a) undischarged bankrupts and Directors of Banks which
have been compulsorily wound up for insolvency should be
disqualified as Directors of a Bank, and (b) persons who
have been convicted of dishonourable commercial dealings
should be excluded from being Directors of Banks.
21. With regard to (ii), we have considered and
rejected a suggestion that the High Commissioner should
take power by legislation to approve or refuse the
appointment of Auditors of a Bank since such power will,
in fact, amount to discrimination and would throw on
Government a responsibility which we consider undesirable.
On the other hand we recognise that certain locally
licensed Auditors are unfitted for the responsible task of
auditing Bank accounts while they might be quite fitted
for auditing the accounts of small trading companies.
The Committee therefore recommend (Dr. Smoira dissenting
on the grounds that without proof of inability or
negligence it would be unfair to withdraw a right granted
under existing legislation) that a Section should be
inserted in the Banking Ordinance to the effect that
"No person may be appointed as an Auditor of a Bank
unless he is properly qualified by certificate from some university or other institution approved by the High Commissioner for the purpose; or by membership
of