The revised form of balance sheet in Appendix D
75
to the Report is very similar to a revised form recently
proposed in India and does not appear to call for detailed
criticism, Perhaps the chief item omitted, which it is
considered desirable to specify among the liabilities in
India, is loans on mortgage; but the necessity for this may
not exist in Palestine. It might also be considered whether
to prescribe that the valuation of securities should not be
in excess of cost or market price, whichever is the lower.
There is little that we can say about the
proposed Advisory Committee, most of the functions of which,
it is hoped, will be performed in India by the Reserve Bank.
On general grounds one is inclined to doubt its effectiveness
unless it has some permanent staff and some power to require
information other than that afforded by the formal bank
returns. This links up with Mr. Ezechiel's suggestion
of a Government Inspector.
Opinion in India is very strongly against any attempt
to make provision for liquidity of assets and the Report
similarly recognises that legislative measures are
impracticable. Their proposal that Government should take
power to prescribe liquidity seems very questionable.
Use of name "bank", etc. So far as India is
concerned it is universally recognised as hopeless to try
to define "banking" or to restrict the use of the name
"bank". The proposal made there, which seems worth
considering, is that a Banker's Association should be
established, which would have as its object the promotion
of the interests and efficiency of the banking system,
and membership of which would be confined to persons and
concerns which reached a prescribed standard. Such
members would use the appellation "Member of the Banker's
Association" and the public would come to regard that as
a