CO129-555-6 Banking crisis 24-9-1935 - 18-10-1935 — Page 37

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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