CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 34

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been no minimum requirement of this nature in the past it

would be harsh as a start to fix the minimum at £P.50,000.

We therefore recommend that a minimum capital of £P.25,000

should be laid down in the Law as a condition for the

registration of new Banks which minimum must be fully paid

up in cash within one year from the date of incorporation

of the Bank. Furthermore the Registrar of Companies

should not issue the certificate enabling the Bank to

commence business until it is proved to his satisfaction

that the £P.25,000 has actually been paid up in cash.

Dr. Smoira, however, considered that an amount of £P.10,000

paid up in cash would be adequate, especially having regard

to the fact that the public already discriminate between

the larger and smaller Banks as shown in paragraph 11 and

to the conclusion in paragraph 12 that the question is not

one of immediate concern. In this connection certain

bankers, both commercial and co-operative, with whom the

Chairman discussed the matter endorsed the views expressed

by Dr. Smoira, and confirmed that there was room in the

general economy of the country for small Banks with a

paid-up capital of £P.10,000 to supply credit to the

small trader and artisan. They all agreed, however, that

the number of small Banks operating in Palestine at present

is excessive and constitutes a potential danger to the

economy of the country.

15.

With regard to foreign Banks it was considered

that while a minimum prescribed paid-up capital of

£P.25,000 was, in the circumstances, reasonable for local

Banks, foreign Banks should be subject to even greater

restrictions in this respect in order to avoid Banks

intending to operate in Palestine being registered abroad

for