52
52.
We, therefore, recommend that ordinary commercial
Banks should, notwithstanding the fact that they may be
mortgagees, be allowed freely to acquire property in
settlement or part settlement of debts. This will involve
an amendment of the Mortgage Law Amendment Ordinance, 1929,
which gives a Bank the like right of buying in of a
property mortgaged subject to the like restrictions as are
applicable to a Credit Bank. But we recommend that no
Bank, with the exception of a credit Bank should be
permitted to hold real estate not required for the use of
the Bank or its branches for a period exceeding three years
except in cases specially approved by the High Commissioner
where the necessity for such extension is for the purpose of
bona fide banking business. Mr. Shenkar thinks, however,
that Banks holding land as trustees for groups of customers
should be exempted from this provision.
53. With regard to item (b) of the Second Part of our
terms of reference, although certain of the privileges
accorded to Credit Banks under the Credit Banks (Facilities)
Ordinance, 1920, and the Credit Banks Ordinance, 1922, in
return for certain restrictions and control have now been
accorded on similar terms to commercial Banks, we think that
the principles of these Ordinances should remain for those
institutions whose principal object is the lending of money
on the security of immovable property. We recommend,
however, an amendment to these Ordinances.
54. With regard to the restrictions under Section 4(11)
of the Credit Banks Ordinance, 1922, as to conditions of
repayment of loans before the date of maturity, we consider
that the restrictions are prejudicial to the business of
Credit Banks.
This