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asign of special status.
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Such a professional
organisation would doubtless be useful in many ways.
the present connexion its greatest utility would be
the creation of a new category of respectable banks and
the avoidance of any attempt to restrict the use of the
word "bank" or to define banking activities, which,
in India, at all events, is considered impossible.
idea has not been tried out, but it seems to have
possibilities.
In
The
As regards fixing a maximum rate of interest on
deposits, I am not aware that this problem has ever
arisen in serious form in india. Our general experience
of attempts to regulate rates of interest in India does
not suggest that a proposal of this nature would be easy
to make effective.
Mr. Ezechiel's proposal of a Government Inspector
is very similar to one which was favourably viewed by us
some years ago. Recent discussions have resulted in its
rejection, but largely on account of the imminence of
the Reserve Bank. In the circumstances of Palestine there
would seem to be much in favour of it.
The question of licensing is a thorny one on
which there is no agreement in India. On the whole
opinion tends to favour some system by which a licence
from the Reserve Bank would be necessary before a new bank
started business. On the question of imposing some
effective check on the Articles of Association, however,
opinion strongly favours the conferment of power on the
Registrar to insist on sound provisions.
As regards compulsory allocation to reserves
it is recognised that no provision of this kind can avail
against unsound management (the same being true of most
of